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Morningstar Market Commentary: First Quarter 2009

The markets' hot streak has leveled off.

Sanjay Arya, 07/14/2009

The second quarter began in the same manner as the first quarter ended--with stocks soaring--but the torrid run appears to have stalled since late May, and the markets have leveled off for the rest of the quarter. Altogether, the Morningstar US Market Index added 17% for the quarter and is up 5% for the year.

In our quarter-end review, Travis Pascavis, CFA, director equity indexes, provides insight into the market's performance.

Click here to access the Morningstar Market Commentary.

A recap of the key observations:

* Small beats large. Small stocks shrugged off the economic doldrums and turned in a stellar return over the quarter. The Morningstar Small Cap Index was up 24% for the quarter, while the Morningstar Large Cap Index was up 15%.
* Corporate bonds beat Treasuries. Unlike in 2008, corporate bonds are the quarter's darlings. The Morningstar Treasury Index dropped 3% for the quarter, and the Morningstar Corporate Bond Index gained 9%, which is one for the record books.
* Commodities rise. Commodity investors anticipate an increase in global demand, spurring a rebound in commodities. The Morningstar Long-Only Index rose 14% in the quarter.

To access the report, please click on this link: Morningstar Market Commentary.

Sanjay Arya is director of Morningstar Indexes.


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