Weekend Market X-Ray: Barometer Glows Green for the Week
Stocks continued to rally on positive manufacturing and productivity news.
Market Update
U.S. equity markets continued to rally this week on positive manufacturing and productivity news. U.S. government bond prices continued to weaken on higher rate concerns while energy commodities surged ahead for another week in a row.
The Morningstar US Market Index ended up 2.5% this week on a surge of buying in small-cap stocks. The Morningstar Small Cap Index finished up 5% thanks to 50%-plus stock increases for TiVo and Wind River stemming from favorable court judgments and acquisition activity. Data Domain's and Bob Evans' stock prices were up about 25% on average as well on positive buyout and earnings news.
The Morningstar Large Value Index was weighed down this week by a 19% stock price decline at Valero Energy (VLO), the largest refiner in North America, due to a very dilutive follow-on offering priced at $18 per share. The stock had closed at $22 the day the deal was announced. The Morningstar Emerging Markets Index finished the week up 2% and is now up over 42% for the year.
The Morningstar Core Bond Index finished up about 0.4% this week as corporate bond prices rallied 1.5% while government bond prices dropped nearly 0.2%. Treasury prices continue to be pressured by worries about future inflation and eventual rate increases once the U.S. economy recovers.
The Morningstar Long-Only Commodity Index is now up nearly 15% for the year as oil continued its rally. Oil prices touched a seven-month high of $70 a barrel Friday on better-than-expected unemployment news in the U.S. Livestock prices fell while agricultural commodities generally rose. Precious metals moved up modestly.
| Bond Index One-Week Returns (Data as of 06-04-09) | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | 0.38 | 3.61 | 4.85 |
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| US Government Bond | -0.17 | 2.36 | 4.85 |
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| Corporate Bond | 1.47 | 5.70 | 5.74 |
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| Mortgage Bond | 0.36 | 3.70 | 4.36 |
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| Commodity Index One-Week Returns (Data as of 06-04-09) | ||
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| 1-Week Return % | YTD Return % | |
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| Long-Only Commodity | 3.81 | 14.86 |
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| Long/Flat Commodity | 0.42 | 1.16 |
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| Long/Short Commodity | -0.33 | -7.26 |
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