Earnings Keep Market on the Green
Positive earnings news from a handful of banks, industrial conglomerates, and media firms keep rally rolling.
Market Update
U.S. equity markets rose almost 2% this week on positive earnings news. Bonds were also up a little, as corporate bonds rose nearly 2% on strong price increases in financial-services issues. Commodities were fairly flat as increases in soybeans, sugar, and copper were offset by decreases in oil, corn, and gold.
The Morningstar US Market Index ended up nearly 2% thanks to positive earnings news from a handful of banks, industrial conglomerates, and media firms. The Morningstar Small Cap Index was the major winner this week as value and core names like Jarden , E*Trade , and Wyndham (WYN) all saw stock price increases on positive news. The Morningstar Media Sector Index finished the week up another 4% and is now up 16% for the month of April, second to the 20% run for the Morningstar Financial Services Index month to date.
The Morningstar Core Bond Index was up slightly this week thanks to a 2% increase in the Morningstar Corporate Bond Index. Hartford (HIG), J.P. Morgan (JPM), Prudential (PRU), Bank of America (BAC) and others all saw 10%-plus price increases in their bonds. The inverse relationship between price and yield has pushed the average yield on this investment-grade index to about 6.6%.
The Morningstar Long-Only Commodity Index was flat on mixed action in the sectors. Strong increases in soybeans and sugar reflected expected increases in consumption. Copper continued its rally this year and is now up over 50% year to date as investors predict ongoing demand for the industrial metal. The Morningstar Long/Short Commodity Index declined as short positions in soybeans and copper continued to weigh on the index.
| Bond Index One-Week Returns | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | 0.56 | 3.23 | 3.73 |
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| US Government Bond | 0.47 | 1.95 | 4.99 |
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| Corporate Bond | 1.73 | 6.63 | 5.49 |
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| Mortgage Bond | 0.05 | 2.76 | 1.64 |
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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 | 0.06 | -1.01 |
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| Long/Flat Commodity | -0.01 | -0.65 |
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| Long/Short Commodity | -0.64 | -4.17 |
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For more information, call +1 312 384-3735. Daily updates and historical values are available at http://indexes.morningstar.com