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  • Review current performance analyses and weekly statistics for stock and bond markets in the U.S. and abroad, including regional and broad-based international indexes and principal currency exchange rates.

    Week Ended November 21, 2014

    Global growth hopes drive fifth week of gains

    The large-cap Standard & Poor's 500 Index notched its fifth weekly gain and moved to record highs as investors appeared to celebrate news of economic stimulus measures overseas. The technology-heavy Nasdaq Composite Index lagged the S&P 500 and Dow Jones Industrial Average, which both got a boost late in the week from a bounce in oil prices and energy shares. The small-cap Russell 2000 Index lagged the other benchmarks for the week and remained the weakest performer for the year to date.

    Japan delays consumption tax to deal with recession

    While developments in the U.S. economy often tend to drive global markets, Wall Street appeared to be especially outward looking over the week, rallying in response to hopes for better growth in three different parts of the world. Before U.S. trading began on Monday, the Japanese government revealed that the country's economy had contracted for a second consecutive quarter—crossing the commonly accepted threshold of being in recession. While Japanese stocks initially sunk on the news, investors eventually appeared to welcome the promise of further stimulus. In fact, the government announced that it was pushing back an increase in the consumption tax planned for next year.

    Hopes for more monetary action in Europe

    Coordinated fiscal action to revive the European economy has been more difficult to achieve, but investors also welcomed signs that the eurozone's central bank was prepared to enact more monetary stimulus. European Central Bank President Mario Draghi appeared to move U.S. markets at two points during the week by promising aggressive action to boost inflationary expectations in the eurozone.

    China slowing but likely to avoid a "hard landing"

    The biggest overseas driver for U.S. gains might have been China's surprise move before markets opened in New York on Friday to cut interest rates—the first such cut in two years. T. Rowe Price's Hong Kong-based managers and analysts expect the Chinese economy to slow in 2015 as it tries to stimulate domestic growth, but they believe that policymakers will successfully avoid the "hard landing" of an abrupt slowdown. They also believe that growth elsewhere in the region will pick up in 2015, particularly in countries that have elected reform-minded leaders.

    U.S. economy remains on track

    U.S. growth signals might have also played a role in the week's gains, if a secondary one. Investors were encouraged by an increased reading of homebuilder confidence, and an index of mid-Atlantic factory activity surprised observers by reaching its highest level in over two decades. Weekly jobless claims also reached their most favorable level in years, remaining below 300,000 for the first time since 2000, when the total pool of workers was smaller.

    U.S. Stocks1
    Index2 Friday's Close Week's Change % Change
    Year-to-Date
    DJIA 17810.06 175.32 7.44%
    S&P 500 2063.50 23.68 11.64%
    NASDAQ Composite 4712.97 24.43 12.84%
    S&P MidCap 400 1444.21 13.43 7.57%
    Russell 2000 1172.56 -1.70 0.77%
    This chart is for illustrative purposes only and does not represent the performance of any specific security. Past performance cannot guarantee future results.

    1Source of data Reuters, obtained through Yahoo! Finance Closing data as of 4 p.m. ET.

    2The Dow Jones Industrial Average and the Standard & Poor's 500 Stock Index of blue chip stocks, the Standard & Poor's MidCap 400 Index, and the Russell 2000 Index are unmanaged indexes representing various segments by market capitalization of the U.S. equity markets. The Nasdaq Composite is an unmanaged index representing the companies traded on the Nasdaq stock market and the National Market System.

    Week Ended November 21, 2014

    Minutes from October Fed meeting offer little new insight

    U.S. Treasuries stayed in a narrow trading range following an early-week rally on the surprising news that the Japanese economy contracted in the third quarter. The minutes from the Federal Reserve's October policy meeting offered little new information about when the central bank will begin to raise interest rates. U.S. core consumer price index (CPI) data for October showed an increase of 0.2%, which topped expectations and helped ease some market worries about a lack of inflation.

    ECB to increase monetary accommodation if needed

    In a speech on Friday, European Central Bank (ECB) President Mario Draghi once again stated that the ECB is committed to expanding its bond purchase program if the eurozone economy continues to falter. Draghi's comments triggered a rally in core eurozone sovereign bonds, with the yield on 10-year German government notes dropping back below 0.80%. In another move to boost global liquidity, China's central bank unexpectedly cut its benchmark lending rates for the first time in over two years in an effort to boost annual growth toward the government's 7.5% target for 2014.

    Flood of new issuance weighs on investment-grade corporate debt

    Investment-grade corporate bonds lost ground as heavy new issuance weighed on the secondary market. Chinese e-commerce giant Alibaba Group Holding issued $8 billion of new dollar-denominated bonds in a heavily oversubscribed offering. T. Rowe Price corporate bond analysts and traders expect ongoing pressure on the secondary market amid a continuing flood of new issuance into December. In the high yield corporate bond market, higher-quality debt outperformed lower-quality securities.

    Petrobras scandal adds to volatility in Brazil's bonds

    Emerging markets bonds were generally higher. A scandal involving allegations of money laundering and graft at Brazilian state-controlled oil company Petrobras contributed to the elevated volatility in the country's bonds. The debt of oil-importing countries, such as Turkey and Indonesia, benefited from the recent steep drop in oil prices. Investors applauded Indonesia's move to raise both interest rates and fuel prices to contain inflation and improve the country's fiscal condition, respectively.

    U.S. Treasury Yields1
    Maturity November 21, 2014 November 14, 2014
    2-Year 0.50% 0.51%
    10-Year 2.31% 2.32%
    30-Year 3.02% 3.04%

    This table is for illustrative purposes only. Past performance cannot guarantee future results.

    1Source of data: Bloomberg.com, as of 4 p.m. ET Friday, November 21, 2014.

    Week Ended November 14, 2014

    International Stocks

    Foreign stock markets closed higher for the week ending November 14, 2014 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 0.88%.

     
    Region/Country Week's Return % Change Year-to-Date
    EAFE 0.88% -2.55%
    Europe ex-U.K. 0.89% -5.08%
    Denmark -0.20% 9.65%
    France 0.93% -8.38%
    Germany 0.19% -12.20%
    Italy -0.15% -5.65%
    Netherlands 1.35% -4.18%
    Spain 1.19% -3.01%
    Sweden 0.82% -4.62%
    Switzerland 1.73% 3.04%
    United Kingdom 0.19% -3.77%
    Japan 1.51% -1.19%
    AC Far East ex-Japan 1.32% 4.22%
    Hong Kong 4.04% 11.18%
    Korea -0.37% -10.26%
    Malaysia -0.81% -4.20%
    Singapore 0.41% 2.84%
    Taiwan 0.97% 10.56%
    Thailand 0.55% 23.35%
    EM Latin America -3.48% -6.08%
    Brazil -4.71% -9.23%
    Mexico -2.22% -1.00%
    Argentina -0.49% 28.74%
    EM (Emerging Markets) 0.34% 1.42%
    Hungary 3.59% -18.86%
    India 0.47% 29.81%
    Israel -0.05% 25.46%
    Russia -1.21% -27.63%
    Turkey 5.49% 17.80%

    International Bond Markets

    International bond markets in developed countries were lower this week, with the J.P. Morgan Global Government Bond Less U.S. Index losing -0.09%.

     
    Region/Country Week's Return % Change Year-to-Date
    Developed Markets -0.09% -2.04%
    Europe    
    Denmark 0.87% -0.56%
    France 0.87% -0.39%
    Germany 0.81% -1.71%
    Italy 0.89% 1.88%
    Spain 0.82% 2.86%
    Sweden 0.69% -4.00%
    United Kingdom -0.69% 4.10%
    Japan -1.19% -7.08%
    Emerging Markets -0.26% 7.82%
    Argentina -0.03% 25.10%
    Brazil -0.89% 7.55%
    Russia -0.72% -0.94%

    International Currency Markets

    On the currency front, the U.S. dollar was stronger against the major currencies for the week.

     
    Currency Close
    (11/14/2014)
    Week's Return
    (U.S. $)
    % Change
    Year-to-Date (U.S. $)
    Japanese yen 116.495 1.31% 9.78%
    Euro 1.2481 -0.53% 9.43%
    British pound 1.56471 1.24% 5.53%

    1U.S. dollars per national currency unit.

    Sources: Foreign stock markets and currency sections are from Rimes Technologies, using MSCI data. International bond markets are from J.P. Morgan.

    Note: All returns are in U.S. dollars. All bond indices are J.P. Morgan. All stock indices are Morgan Stanley Capital International (MSCI).

    Equity Indices
    EAFE: MSCI Europe, Australasia, and Far East Index
    Europe Ex-U.K.: MSCI Europe ex-U.K. Index
    Far East Ex-Japan: MSCI AC Far East ex-Japan Index
    Latin America: MSCI Emerging Markets Latin America Index
    Emerging Markets: MSCI Emerging Markets Index
    Bond Indices
    Developed Markets: J.P. Morgan Global Government Bond Less U.S. Index
    Emerging Markets: J.P. Morgan Emerging Markets Bond Index Plus

    All charts are for illustrative purposes only and do not represent the performance of any specific security. Past performance cannot guarantee future results.
    Copyright 2014, T. Rowe Price Investment Services, Inc., Distributor. All rights reserved.