Week in Review: No Job? Try Panning for Gold.
Gold and other precious metals rise as employment and economic concerns still weigh.
Market Update
Despite Friday's rally, U.S. equity markets ended down this week across the board. Hope springs eternal, with some unemployment data observers seeing positive signs in job cut numbers that are still declining, but at a declining rate.
Other observers see a formidable challenge ahead for investors, given the rising unemployment rate that's riding on top of a large "underemployment" rate. When combined, these two rates suggest 15%-20% of the U.S. workforce probably does not have enough spending power to return GDP growth to positive territory anytime soon.
The Morningstar US Market Index ended the week down in nearly every style and sector category. The Morningstar Large Growth Index was one of the least punished indexes, given the strong stock performances by Newmont Mining (NEM), a firm that benefits when investors push the price of gold up during uncertain times, and Costco (COST), a low-cost retailer that announced better-than-expected financial data this week.
The Morningstar Core Bond Index was up this week as government, corporate, and mortgage bond prices pushed indexes higher. The year-to-date return for the Morningstar Corporate Bond Index is now more than 14%, an encouraging sign for some hearty investors who got in when spreads were considerably higher earlier this year. An increasing appetite for risk that fosters lower-cost credit will be beneficial as businesses ramp up to restock inventory levels that are approaching lean levels in many sectors.
The Morningstar Long-Only Commodity Index was down this week. Oil and gas commodity prices continue to move lower on ample supply data. Natural gas stockpiles are quite high in the United States and have pushed prices for this commodity to seven-year lows. Gold and other precious metals rose as investors weighed various economic uncertainties.
| Bond Index One-Week Returns (Data as of 09-03-09) | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | 0.63 | 3.07 | 4.20 |
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| US Government Bond | 0.76 | 2.14 | 5.02 |
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| Corporate Bond | 0.73 | 4.54 | 5.97 |
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| Mortgage Bond | 0.45 | 3.10 | 2.45 |
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| Commodity Index One-Week Returns (Data as of 09-03-09) | ||
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| 1-Week Return % | YTD Return % | |
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| Long-Only Commodity | -2.41 | 7.88 |
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| Long/Flat Commodity | 0.46 | 1.48 |
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| Long/Short Commodity | 0.93 | -1.64 |
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For more information, call +1 312 384-3735. Daily updates and historical values are available at http://indexes.morningstar.com