John Hancock: Weekly Market Recap Week Ended September 21st

Sector shake-up

As of Monday, September 24, the telecommunication services sector is no more; it’s been replaced by a new sector called communication services, which is home to stocks such as Facebook, Netflix, and Google parent Alphabet. The move by index providers Standard & Poor’s and MSCI recategorizes companies to better reflect today’s economy and market composition.

New records

Further signs of positive economic momentum helped send most stocks to solid gains for the second week in a row, although growth stocks and small caps lagged. The S&P 500 topped its record set in late August, while the Dow’s weekly gain of more than 2% sent that index above a record established in late January.  The NASDAQ slipped.

Breaching 3%

The yield of the 10-year U.S. Treasury Bond climbed to the highest level in four months, peaking at around 3.08% on Wednesday as bond prices fell for the fifth daily trading session in a row. If the yield stabilizes above 3.00%, it would mark the first sustained stretch above that threshold since 2011.

Fed ahead

The U.S. Federal Reserve Board is widely expected to approve another increase in short-term interest rates when it concludes a two-day meeting on Wednesday. If the Fed decides on another quarter-point increase, it would be the fourth rate hike in 10 months and the third this year.

Small trails large

U.S. small-cap stocks have outperformed large caps year to date, but they trailed by a wide margin in the latest week, as the Russell 2000 Index, a small-cap benchmark, fell slightly. Trade issues have been a big differentiator across the market recently, as smaller firms tend to be more domestically focused than bigger companies and are less exposed to trade conflicts.

Source: https://wmr.jhinvestments.com