John Hancock: Weekly Market Recap Week Ended July 1st

Historic first half

As June concluded, the S&P 500’s closing level on Thursday was down 21.0% from the start of the year, marking the index’s worst first-half performance of any year since 1970. As for June’s monthly result, the index was down 8.4%, the worst June performance since 2008, according to S&P Dow Jones Indices.

Recession fears

A report on U.S. manufacturing added to concerns that rising interest rates could push the U.S. economy into a recession. The Institute for Supply Management’s manufacturing gauge fell more than expected in May, and one component of Friday’s report that tracks manufacturing orders and employment slipped below 50—a level suggesting activity is contracting rather than growing.

Yield compression

Prices of U.S. government bonds climbed for the third week in a row, sending the yield of the 10-year U.S. Treasury bond down to 2.89% on Friday from 3.13% at the end of the previous week. As recently as June 14, the yield climbed as high as 3.48%—a level not seen since April 2011.

Jobs ahead

A monthly U.S. labor market update due out on Friday will show whether the strong—but moderating—jobs growth recorded in recent months extended into June. In May, the economy generated 390,000 new jobs—the smallest monthly gain since April—while the unemployment rate stayed unchanged at 3.6%.

Source: https://wmr.jhinvestments.com/