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 October 9, 2015

Stocks see best weekly gain in months
The Standard & Poor's 500 Index recorded its strongest weekly gain in several months as investors appeared to grow more confident that the Federal Reserve would not raise interest rates in 2015. The small-cap Russell 2000 and S&P MidCap 400 Indexes outperformed their large-cap counterparts, while some weakness in technology shares was partly responsible for the Nasdaq Composite lagging the other benchmarks. The Nasdaq ended the week as the only index with a gain for the year-to-date period, however. All of the major benchmarks had reversed the recent correction by Friday and moved within 10% of the all-time highs they established earlier in the year.

Technical factors may have played a role
Stocks moved higher through much of the week, which T. Rowe Price traders attributed partly to technical factors, such as the need of hedge funds and other speculative traders to cover "short" positions—or bets that a stock will lose value. The week's calendar of economic data was relatively light, and investors appeared to shrug off a moderately disappointing report on activity in the services sector. Most data suggest that the services sector remains healthy, even as global weakness has taken a toll on the much smaller U.S. manufacturing sector. In a recent interview with MarketWatch, T. Rowe Price industrials analyst Andrew Davis noted that recent freight data indicate that the industrials sector may have entered a recessionary phase, even as the overall economy continues to grow.

Hopes rise that Fed will wait until 2016 to increase rates
Indeed, bad economic news may have served, once again, as good market news for many investors, as conviction appeared to grow that slowing job gains and global economic concerns would push back the first Fed rate hike to 2016. Stocks rallied Thursday afternoon, following the release of minutes from the Fed's mid-September policy meeting, which showed that officials had harbored concerns about the effect of the global slowdown on the U.S. economy even before the previous week's disappointing jobs report. One Fed official acknowledged in an interview that the report had caused him to be on the lookout for further weak data, although he thought a rate increase by December was still likely.

Materials and energy earnings likely to tumble
The third-quarter earnings reporting season kicked off during the week with a somewhat disappointing result from metals giant Alcoa on Thursday. Data and analytics firm FactSet reports that analysts have lowered their earnings estimates for energy and materials firms more than for any other sectors in recent months.

Energy rally may prove short-lived
The outlook for materials and energy firms brightened somewhat during the week, however, as oil and other commodity prices recovered a portion of their sharp recent losses. Energy stocks rallied Wednesday, although T. Rowe Price traders saw little reason for the move in improving fundamentals. Generally, T. Rowe Price energy analysts and managers believe that oil prices are likely to remain under pressure for some time, partly because technological advances will continue to reduce the cost of production.

U.S. Stocks1
Index2 Friday's Close Week's Change % Change
DJIA 17084.49 612.12 -4.14%
S&P 500 2014.89 63.53 -2.14%
NASDAQ Composite 4830.47 122.69 1.99%
S&P MidCap 400 1441.78 57.62 -0.73%
Russell 2000 1165.09 52.33 -3.29%
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 October 9, 2015

Demand for riskier assets hurts U.S. Treasuries
Investors eased back into riskier asset classes, dampening demand for U.S. Treasury bonds and driving their yields higher. (Bond prices and yields move in opposite directions.) The minutes from the Federal Reserve's September policy meeting showed concerns about low oil prices and the strong dollar keeping inflation below the central bank's 2% target, although they also indicated that policymakers still anticipate raising rates before the end of the year. However, in a sign that the market doubts that short-term rates will increase in the next few months, the Treasury Department auctioned new three-month Treasury bills at a yield of 0.00% for the first time.

Uptick in oil prices supports energy-related corporate bonds
The investment-grade corporate bond market saw healthy demand as sentiment toward risk improved. Bonds from energy- and commodity-related issuers performed better than in recent weeks as a result of an uptick in oil prices. High yield bonds rallied on the rising oil prices and higher equity markets. Energy sector issuers account for a substantial proportion of noninvestment-grade benchmark indexes.

Emerging markets debt rallies
Improving risk sentiment and higher oil prices also led to a rally in emerging markets debt and currencies. Bonds from countries that are major oil exporters, such as Venezuela and Colombia, were among the best performers. Brazilian bonds also rallied, although this seemed to be largely due to global factors rather than positive domestic developments. Brazil's political dysfunction again prevented the country from making progress on needed fiscal reforms as the congress could not reach a quorum to vote on whether to ratify President Dilma Rousseff's vetoes on spending bills that would further increase the fiscal deficit.

Weakness in municipal bonds as investors eye busy issuance calendar
Municipal bonds were weak as investors anticipated elevated levels of new supply. At the beginning of the week, municipal issuers planned to sell more than $15 billion of new debt in the next 30 days. The largest new deal of the week came from Chicago's O'Hare Airport, which brought almost $2 billion of revenue-backed bonds to market. Since the airport is relatively insulated from the city of Chicago's fiscal troubles, the bonds enjoyed strong demand.

U.S. Treasury Yields1
Maturity October 9, 2015 October 2, 2015
2-Year 0.65% 0.58%
10-Year 2.10% 1.98%
30-Year 2.94% 2.82%

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

1Source of data:, as of 4 p.m. ET Friday, October 9, 2015.

Week Ended October 2, 2015

International Stocks

Foreign stock markets closed lower for the week ending October 2, 2015 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 0.69%.

Region/Country Week's Return % Change Year-to-Date
EAFE 0.69% -3.49%
Europe ex-U.K. 0.54% -2.33%
Denmark -1.20% 17.71%
France 0.46% -0.01%
Germany -0.56% -8.42%
Italy 1.18% 6.72%
Netherlands 0.36% -0.54%
Spain 1.83% -12.03%
Sweden 1.26% -5.66%
Switzerland 0.97% 0.03%
United Kingdom 0.70% -6.73%
Japan 1.28% 3.50%
AC Far East ex-Japan 1.65% -11.62%
Hong Kong 1.05% -3.70%
Korea 2.95% -10.87%
Malaysia 0.29% -25.85%
Singapore -2.20% -21.83%
Taiwan 2.64% -10.66%
Thailand -3.54% -18.74%
EM Latin America 2.70% -27.10%
Brazil 4.24% -36.55%
Mexico 1.41% -12.51%
Argentina -3.76% -21.32%
EM (Emerging Markets) 1.93% -13.93%
Hungary 1.18% 22.87%
India 2.72% -4.92%
Israel -3.55% 2.22%
Russia -2.92% 6.16%
Turkey 1.36% -30.43%

International Bond Markets

International bond markets in developed countries were higher this week, with the J.P. Morgan Global Government Bond Less U.S. Index gaining 1.63%.

Region/Country Week's Return % Change Year-to-Date
Developed Markets 1.63% -2.47%
Denmark 1.79% -5.89%
France 1.91% -5.82%
Germany 1.76% -5.61%
Italy 1.71% -3.45%
Spain 2.37% -5.83%
Sweden 1.91% -3.84%
United Kingdom 1.58% 0.64%
Japan 1.38% 0.92%
Emerging Markets 0.00% 0.00%
Argentina 0.00% 0.00%
Brazil 0.00% 0.00%
Russia 0.00% 0.00%

International Currency Markets

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

Currency Close
Week's Return
(U.S. $)
% Change
Year-to-Date (U.S. $)
Japanese yen 119.225 -1.33% -0.56%
Euro 1.12761 -0.91% 6.82%
British pound 1.52021 -0.16% 2.51%

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.