Quarter ends on uncertain note after a strong quarter performance.
Although markets posted strong second-quarter performance, the period ended on an uncertain note with many cracks appearing in the outlook.
The sharp rise in long-term interest rates through June forced investors to rethink the case for equities. Meanwhile, fear of rising inflation, worries of a deeper downturn in the U.S. housing market, and unease over possible fallout from leverage in the financial system all contributed to the debt market sell-off. The Morningstar US Market Index managed to end the quarter with a respectable gain of 6.2%. The Morningstar Core Bond Index, our newly launched flagship investment-grade bond index, slipped 0.6% during the same period.
In our quarter-end review, Morningstar Indexes research analyst Arijit Dutta provides insight into the market's performance. A recap of some of the key observations:
Sanjay Arya is director of Morningstar Indexes.