Week in Review: Data Add Zest to the Market
Investors celebrate news that the U.S. economy appears to be on firmer ground.
Investors celebrate news that the U.S. economy appears to be on firmer ground.
U.S. equity markets ended up strongly this week as investors celebrated news that the U.S. economy appears to be on firmer ground. U.S. data on housing sales were stronger than expected, adding some zest to a week of equity market appreciation.
Positive comments from the Federal Reserve at the end of the week were also helpful. Bonds in general enjoyed modest price appreciation this week while many agricultural commodities followed natural gas down the past five days.
The Morningstar US Market Index ended up 2.25% this week, thanks to economic data detailing stronger existing home sales, stronger earnings, and positive oil inventory trends. The Morningstar Small Cap Index was one of the biggest beneficiaries of investor optimism this week after taking significant punishment last week. The Morningstar Emerging Markets Index continued its ascent and is now up more than 50% year to date.
The Morningstar Core Bond Index was up another half a percent this week. Evidence of waning appetites for corporate bonds in some recent offerings may suggest yields could rise to attract bond buyers again.
The Morningstar Corporate Bond Index is now up nearly 13% for the year, a level that may moderate should bond prices slip back due to demand for higher yields from buyers. The Morningstar Eurobond Corporate Index, up a respectable 9% year to date, could also be susceptible to increased demand for more yield.
The Morningstar Long-Only Commodity Index was down sharply this week. Cotton, coffee, soybeans, and many other agricultural commodities suffered declines as a result of strong supply situations relative to demand. The front-month natural-gas contract has slipped to below $3, the lowest level in more than a year and well off the $13 highs seen in mid-2008.
Bond Index One-Week Returns (Data as of 08-20-09) | |||
| 1 Wk | Yield | Duration |
Core Bond | 0.51 | 3.25 | 4.26 |
US Government Bond | 0.71 | 2.27 | 4.97 |
Corporate Bond | 0.42 | 4.70 | 5.94 |
Mortgage Bond | 0.35 | 3.42 | 2.64 |
Commodity Index One-Week Returns (Data as of 08-20-09) | ||
1-Week Return % | YTD Return % | |
Long-Only Commodity | -3.25 | 10.04 |
Long/Flat Commodity | -1.12 | 0.71 |
Long/Short Commodity | 0.26 | -2.41 |
For more information, call +1 312 384-3735. Daily updates and historical values are available at http://indexes.morningstar.com
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