Market X-Ray: Tug of War Between Buyers and Sellers
The market moves sideways as some measure pace of recovery with a stopwatch, others with a sundial.
Market Update
U.S. equity markets ended slightly down this week as investor selling on Monday was offset by strong buying on Thursday.
The tug-of-war between buyers and sellers seems to center around measuring the rate of economic recovery in the near term. Some investors see anemic recovery on the horizon and sell. Others see a quicker recovery and buy. The bond market, for its part, looks healthy. Government bond prices perked up with new demand, and corporate spreads continued to shrink this week, both positive signs that capital markets are warmed up and ready for business.
The Morningstar US Market Index ended just below flat this week as modest strength in growth offset a slight decline in value. There was very little variability to note among the size categories as well. Morningstar's sector indexes indicate the winners this week were telecom and health care, which helped balance weakness in energy and financial services, consistent with the growth/value observations. Outside the U.S., equity markets were quiet. The Morningstar Global Ex US Index finished the week down slightly but remains up about 11% for the year.
The Morningstar Core Bond Index saw some action this week with a 1.2% return. Both the government and corporate bond price indexes were up nearly 1.5%. The Morningstar Corporate Bond Index is up nearly 8% for the year now. Issuers behind this week's strong gainers included Wachovia , Marathon Oil (MRO), 3M (MMM), General Electric (GE), and Time Warner .
The Morningstar Long-Only Commodity Index was down 1.7% for the week on a sell-off in energy and agricultural commodities. Sugar is up about 10% this week, due to ongoing trade and fund buying to meet expected demand.
| Bond Index One-Week Returns (Data as of 06-25-09) | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | 1.21 | 3.50 | 4.69 |
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| US Government Bond | 1.38 | 2.35 | 4.86 |
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| Corporate Bond | 1.55 | 5.44 | 5.82 |
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| Mortgage Bond | 0.85 | 3.58 | 4.07 |
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| Commodity Index One-Week Returns (Data as of 06-25-09) | ||
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| 1-Week Return % | YTD Return % | |
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| Long-Only Commodity | -1.67 | 10.61 |
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| Long/Flat Commodity | 0.42 | 0.66 |
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| Long/Short Commodity | 1.20 | -4.28 |
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For more information, call +1 312 384-3735. Daily updates and historical values are available at http://indexes.morningstar.com