John Hancock: Weekly Market Recap Week Ended November 23rd

Going back in time

The sell-off of the past two weeks has erased the year-to-date gains for the S&P 500 and the Dow, and the S&P entered a correction on Friday by falling more than 10% below its record high set on September 20. It’s the index’s second correction this year, following one in early February.

Solid economy

Many U.S. economic indicators continue to point in a positive direction, despite the recent market sell-off. On Wednesday, the Conference Board Leading Economic Index for the U.S. posted a small monthly gain compared with the prior month, and it remained at a level that historically has suggested a low probability of a near-term recession.

Fed under pressure

Market turmoil is focusing more attention on the U.S. Federal Reserve heading into its next policy meeting on December 18–19. Some Fed leaders have recently signaled that they plan to proceed with their fourth interest-rate increase of the year, despite calls from President Trump and others to slow the pace of rate hikes.

GDP ahead

One of this week’s most closely watched reports is likely to be Wednesday’s update of third-quarter GDP growth. The government’s initial estimate in late October pegged last quarter’s growth at 3.5%—down from the second quarter’s strong 4.2% pace, but slightly above most economists’ expectations.