John Hancock: Weekly Market Recap Week Ended October 18th

Consumer caution

U.S. retail sales slipped in September, declining 0.3% from the previous month. It was the first monthly sales decline in seven months—a period when consumer spending has remained relatively strong, helping to maintain positive momentum for the broader economy amid weak business investment.

Yield curve normalization

A bond market indicator that flashed warning signs about prospects for an economic recession has returned to a more normal level in recent weeks. In late August, the yield of the 10-year U.S. Treasury slipped below that of the 2-year note—a rare instance of yield curve inversion. But the 10-year yield has since climbed 18 basis points above that of the 2-year yield.

Flagging momentum

An index of U.S. indicators showed the economy continued to grow last month, but at a slower pace than in previous months. Five of 10 indicators in the Conference Board’s Leading Economic Index for the U.S. were positive, but September’s overall growth rate was down compared with the previous month.

Market lull

The S&P 500 and the NASDAQ rose slightly for the second week in a row while the Dow slipped. The weekly moves were small–less than 1%–as Tuesday’s rise was largely offset by a decline on Friday. The S&P 500 remained more than 1% below its record high set in late July.

Source: https://wmr.jhinvestments.com