Continued Resilience
Several glowing corporate earnings reports overshadowed weak economic reports this week.
Market Update
Markets demonstrated continued resilience this week, with several glowing corporate earnings reports overshadowing the effects of weak economic reports.
All markets except commodities gained this week. Fueling the bear case were unexpected declines in consumer confidence and same-store retail sales, which ended six straight weeks of gains with a decline of 0.1%.
The Morningstar U.S. Market Index rose 2.29% for the week and is up 6% for the year. No particular style or size stole the show this week, unlike the performance for most of the year. The Morningstar Large Cap Index gained 2.28% and the Morningstar Small Cap Index rose 2.07%. The difference between growth and value was about the same as size.
Many companies are reporting earnings that exceeded expectations during the calendar third quarter. Disney (DIS) and Abercrombie & Fitch (ANF) are two examples giving equity markets a tailwind. Like many large companies, Disney benefited from a diverse product lineup. The firm's dominant cable networks offset weakness at its economically sensitive parks and resorts.
Poor consumer confidence did little to influence fixed-income markets. The Morningstar Core Bond Index advanced 0.54% for the week to yield 2.83%. The Morningstar U.S. Government Bond Index gained 0.42%, while the Morningstar Corporate Bond Index increased 0.71%. Treasury auctions raised $81 billion in notes and bonds this week, which was not enough to hold back the index.
The Morningstar Long-Only Commodity Index gave back 1.29%, but is up 13.76% for the year. The energy and livestock sectors were down the most. The Morningstar Energy Commodity Index dropped 3.66%. Natural gas extended its losing streak, dropping 7%. The Morningstar Long/Short Index lost 1.59%, as many commodities, such as natural gas, have had many reversals on the heels of significant gains.
| Bond Index One-Week Returns (Data as of 11-12-09) | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | 0.54 | 2.83 | 4.09 |
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| US Government Bond | 0.42 | 2.10 | 4.91 |
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| Corporate Bond | 0.71 | 4.22 | 5.92 |
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| Mortgage Bond | 0.57 | 2.76 | 2.26 |
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| Commodity Index One-Week Returns (Data as of 11-12-09) | ||
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| 1-Week Return % | YTD Return % | |
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| Long-Only Commodity | -1.29 | 13.76 |
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| Long/Flat Commodity | -1.22 | 1.22 |
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| Long/Short Commodity | -1.59 | -5.47 |
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For more information, call +1 312 384-3735. Daily updates and historical values are available at http://indexes.morningstar.com