Market Update
Equity markets witnessed a late-stage rebound from losses earlier in the week, as better-than-expected retail sales and consumer confidence data gave investors greater confidence in the prospects for a U.S. economic recovery.
Another positive sign was Bank of America's (BAC) repayment of the $45 billion it received in U.S. government aid. All told, the Morningstar U.S. Market Index gained 0.12% for the week.
Growth stocks performed about the same as value stocks this week. The Morningstar U.S. Growth Index rose 0.04%, and the Morningstar U.S. Value Index rose 0.01%. Large and small firms performed similarly, as well.
Retailers have posted weak same-store sales this year, especially department stores. As a result, the better-than-expected retail sales figures really helped allay concerns. For example, Macy's (M) rallied 6.5% for the week. Most of that gain came on Friday after retail sales were announced.
Most of the major fixed-income categories fell for the week. The Morningstar Core Bond Index declined 0.13%, sending its yield to 2.77%. The Morningstar U.S. Government Bond Index fell 0.37%, while the Morningstar Corporate Bond Index fell 0.06%. Treasuries headed for their second consecutive weekly loss, as investors gain greater confidence in the U.S. economy. The spread between 2- and 30- year Treasuries is the widest in 17 years, at 3.7%, reflecting a potential rate hike in the future. In addition, this reflects a concession to supply, given the funding requirements for the record U.S. deficits.
Commodities ended the week down, but the deviation among individual commodities was significant. The Morningstar Long-Only Commodity Index fell 4.24% this week. All sectors were in the red as well. Outside of natural gas, which rose 18%, most of the commodities were down. Silver was down the most sharply, posting a loss of 10% for the week.
| Bond Index One-Week Returns (Data as of 12-10-09) | |||
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| 1 Wk | Yield | Duration |
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| Core Bond | -0.13 | 2.77 | 4.11 |
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| US Government Bond | -0.37 | 2.06 | 4.95 |
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| Corporate Bond | -0.06 | 4.14 | 5.92 |
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| Mortgage Bond | 0.08 | 2.72 | 2.28 |
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| Commodity Index One-Week Returns (Data as of 12-10-09) | ||
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| 1-Week Return % | YTD Return % | |
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| Long-Only Commodity | -4.24 | 13.10 |
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| Long/Flat Commodity | -3.86 | 0.43 |
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| Long/Short Commodity | -3.35 | -6.83 |
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