John Hancock: Weekly Market Recap Week Ended May 15th
Another step down
Stocks pulled back, with the major indexes declining around 1% to 3%. It was the third negative week out of the past four, and returns were choppy, with indexes tumbling around 2% on both Tuesday and Wednesday and then rallying on Thursday.
Growth crushes value
While both equity styles had negative weeks, growth stocks continued to outperform their value counterparts, extending a huge leadership advantage for growth stocks in 2020. Year to date through Friday, a growth stock benchmark, the Russell 1000 Growth Index, was essentially flat, compared with a 22% drop for the Russell 1000 Value Index.
Inflation in check
So far, the economic damage from COVID-19 appears to be having a bigger impact on inflation than the recent crisis-driven surge in government spending. Consumer prices fell 0.8% in April, the biggest such monthly decline since 2008. Lower gasoline prices fueled much of the latest drop.
Economic reports released on Friday provided fresh evidence of COVID-19’s devastating impact on the U.S. economy. Retail sales fell a record 16.4% in April, while industrial production fell 11.2%. However, an index of consumer sentiment rose relative to its reading from four weeks earlier.