Market X-Ray: Rally Hits Week Five
Unexpectedly positive earnings news from the financial sector buoys investor optimism.
Market Update
U.S. equity markets rallied Thursday to end slightly up for the week as unexpectedly positive earnings news from the financial sector buoyed investor optimism. Bonds were flat on limited news and commodities were slightly weaker on lower prices for energy and agricultural commodities.
The Morningstar U.S. Market Index ended in positive territory as Thursday's rally erased the declines from earlier in the week. The Morningstar US Value Index was a major beneficiary of Thursday's bank-led rally as it came from behind to outpace the Morningstar US Growth Index by 2-to-1 for this holiday-shortened week. Wells Fargo (WFC) reported a stronger-than-expected profit outlook for the first quarter that boosted its share price over 30% on Thursday. The Morningstar Financial Services Sector Index finished Thursday up 7.8%, starting from a week-to-date position of negative 5%. Other notable sector recoveries this week include industrial materials, business services, and computer hardware.
The Morningstar Core Bond Index was flat this week as a modest decline in the Morningstar US Government Bond Index offset a slight increase in the Morningstar Mortgage Bond Index. The Morningstar Corporate Bond Index remained fairly flat as well, as the average yield on this investment-grade index eased to just below 7%.
The Morningstar Long-Only Commodity Index fell nearly 1% on slight weakness in energy and agricultural commodities. The Morningstar Long/Short Commodity Index declined 0.4% as short positions in cotton, soybean meal, and copper saw price increases this week. Gold is now a long position in the index and that commodity declined 2.5% this week.
| Bond Index One-Week Returns | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | -0.02 | 3.28 | 3.77 |
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| US Government Bond | -0.41 | 1.99 | 5.08 |
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| Corporate Bond | -0.03 | 6.94 | 5.65 |
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| Mortgage Bond | 0.38 | 2.70 | 1.56 |
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| Commodity Index One-Week Returns | ||
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| 1-Week Return % | YTD Return % | |
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| Long-Only Commodity | -0.90 | -2.29 |
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| Long/Flat Commodity | -0.13 | -0.63 |
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| Long/Short Commodity | -0.39 | -3.38 |
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For more information, call +1 312 384-3735. Daily updates and historical values are available at http://indexes.morningstar.com