John Hancock: Weekly Market Recap Week Ended November 10th

Yield volatility

Shifts in the interest-rate outlook continued to drive fixed-income markets as U.S. government bond prices reversed course, retreating in the wake of a rally the previous week. As a result, yields rose, with the rate-sensitive 2-year Treasury climbing back above 5.00% after U.S. Federal Reserve Chair Jerome Powell said the central bank may not yet be done trying to contain inflation.

Small-cap setback

A week after surging nearly 8%, a U.S. small-cap stock benchmark posted a more than 3% weekly decline that significantly lagged the moderately positive results of its large-cap peers. The result left the Russell 2000 Index in slightly negative territory on a year-to-date basis and down 15% from a recent high on July 31.

Sinking sentiment

A survey recorded a decline in U.S. consumer sentiment for the fourth month in a row amid concerns about high interest rates and escalating conflict in the Middle East. The University of Michigan’s preliminary reading on consumer sentiment also showed that consumers’ short-term inflation expectations rose to the highest level in seven months.

Price check ahead

A Consumer Price Index report scheduled to be released on Tuesday will show whether recently mixed inflation trends extended into October. The latest CPI report for September showed a 3.7% annual inflation rate—the same as the previous month. Excluding volatile food and energy costs, September’s core inflation fell to 4.1% from 4.3% the prior month.

Source: https://www.jhinvestments.com/weekly-market-recap