Week Ended August 13, 2010
Stocks moved lower for the week. The smaller-cap indexes
and the technology-oriented Nasdaq performed particularly poorly. Discouraging
economic news weighed on investor sentiment and appeared to confirm that the
economic recovery had slowed substantially. On Tuesday, the Federal Reserve
acknowledged in a statement following its policy meeting that "the pace of
recovery in output and employment has slowed in recent months" and that
"the pace of economic recovery is likely to be more modest in the near
term than had been anticipated." The Fed also announced that it would
begin buying Treasury debt with the money it received from principal payments
on its holdings of agency and mortgage-backed debt. Investors initially
appeared to welcome the Fed's signal that it was ready to act to provide
additional stimulus to the economy. Share prices fell sharply on Wednesday,
however, as the consensus seemed to shift to one of concern that economic
indicators were sufficiently worrisome to cause a change in Fed policy.
Investors were also discouraged by data showing a slowdown in factory
production in China as well as a rise in the U.S. deficit, which appeared
likely to reduce earlier estimates of second-quarter economic growth. On
Thursday, stocks took another leg down in response to a rise in weekly jobless
claims as well as a disappointing earnings report and outlook from technology
bellwether Cisco Systems.
|
U.S. Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
10303.15 |
-350.41 |
-1.20% |
|
S&P 500 |
1079.25 |
-42.39 |
-3.21% |
|
NASDAQ Composite |
2173.48 |
-114.99 |
-4.22% |
|
S&P MidCap 400 |
734.59 |
-37.34 |
1.09% |
|
Russell 2000 |
609.85 |
-40.61 |
-3.82% |
This chart is
for illustrative purposes only and does not represent the performance of any
specific security. Past
performance cannot guarantee future results.
1Source of data Reuters, obtained through Yahoo! Finance Closing
data as of 4:10 p.m. ET.
2The Dow Jones Industrial Average and the Standard & Poor's 500
Stock Index of blue chip stocks, the Standard & Poor's MidCap 400 Index,
and the Russell 2000 Index are unmanaged indexes representing various segments
by market capitalization of the U.S. equity markets. The Nasdaq Composite is an
unmanaged index representing the companies traded on the Nasdaq stock market
and the National Market System.
____________
Week Ended August 13, 2010
During the week, the Federal Open Market Committee (FOMC)
acknowledged that "the pace of recovery in output and employment has
slowed in recent months," and the economic rebound "is likely to be
more modest in the near term than had been anticipated." A day later,
other reports were similarly disturbing. China's economy, the fastest-growing
in the world, appeared to be cooling; the Bank of England lowered its already
reduced outlook for Britain's economy; the American Bankers Association
reported that the delinquency rate on home equity loans reached higher levels
than all other consumer loans; and new trade figures released in Washington
showed that U.S. exports were weakening, which is likely to put pressure on
domestic manufacturers. The FOMC said that it would reinvest payments from
agency and mortgage-backed securities in long-term Treasury bonds in an effort
to stimulate economic growth. The Fed's options are limited, since historically
low interest rates preclude any further reductions. The two-year Treasury yield
rose slightly, but longer-term yields ended lower than they did a week ago.
|
U.S. Treasury Yields1 |
||
|
Maturity |
August 13, 2010 |
August 6, 2010 |
|
2-Year |
0.53% |
0.50% |
|
10-Year |
2.68% |
2.81% |
|
30-Year |
3.86% |
3.99% |
This table is for illustrative purposes only. Past performance cannot guarantee
future results.
1Source of
data: Bloomberg.com, as of 4 p.m. ET Friday, August 13, 2010.
___________
Week Ended August 6, 2010
·
International Currency Markets
Foreign stock markets closed higher for the week ending
August 06, 2010 with the broad international measure, the MSCI EAFE Index
(Europe, Australasia, and Far East), gaining 3.3%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
3.30% |
-1.52% |
|
Europe ex-U.K. |
3.36% |
-4.66% |
|
Denmark |
4.14% |
19.52% |
|
France |
3.82% |
-8.32% |
|
Germany |
3.91% |
-2.63% |
|
Italy |
2.62% |
-12.89% |
|
Netherlands |
1.17% |
-3.22% |
|
Spain |
3.74% |
-14.56% |
|
Sweden |
3.69% |
16.53% |
|
Switzerland |
2.62% |
-0.36% |
|
United Kingdom |
3.69% |
-0.41% |
|
Japan |
3.28% |
4.13% |
|
AC Far East ex-Japan |
2.53% |
4.50% |
|
Hong Kong |
3.57% |
5.71% |
|
Korea |
3.16% |
6.69% |
|
Malaysia |
1.48% |
17.11% |
|
Singapore |
1.18% |
7.86% |
|
Taiwan |
3.36% |
-1.19% |
|
Thailand |
2.95% |
21.66% |
|
EM Latin America |
1.24% |
1.45% |
|
Brazil |
1.00% |
-2.68% |
|
Mexico |
1.82% |
5.73% |
|
Argentina |
7.86% |
24.09% |
|
EM (Emerging Markets) |
2.04% |
3.93% |
|
Hungary |
6.39% |
-5.20% |
|
India |
1.79% |
5.10% |
|
Israel |
2.47% |
-8.90% |
|
Russia |
2.63% |
3.33% |
|
Turkey |
0.36% |
16.17% |
International bond markets in developed countries were
higher this week, with the J.P. Morgan Global Government Bond Less U.S. Index
gaining 2.53%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed Markets |
2.53% |
5.24% |
|
Europe |
|
|
|
Denmark |
3.18% |
1.60% |
|
France |
3.23% |
-0.32% |
|
Germany |
3.04% |
-0.42% |
|
Italy |
3.31% |
-3.80% |
|
Spain |
3.21% |
-5.14% |
|
Sweden |
3.03% |
6.86% |
|
United Kingdom |
2.98% |
5.55% |
|
Japan |
1.96% |
12.38% |
|
Emerging Markets |
1.44% |
11.28% |
|
Argentina |
3.99% |
15.74% |
|
Brazil |
1.00% |
10.36% |
|
Bulgaria |
1.00% |
4.54% |
|
Russia |
1.82% |
8.28% |
On the currency front, the U.S. dollar was weaker against
the major currencies for the week.
|
|
|||
|
Currency |
Close |
Week's Return |
% Change |
|
Japanese yen |
85.140 |
-1.79% |
-9.34% |
|
Euro |
1.32921 |
-2.02% |
7.36% |
|
British pound |
1.59721 |
-1.98% |
1.10% |
1U.S. dollars
per national currency unit.
Sources: Foreign stock markets and currency sections are
from Rimes Technologies, using MSCI data. International bond markets are from
J.P. Morgan.
Note: All returns are in U.S. dollars. All bond indices
are J.P. Morgan. All stock indices are Morgan Stanley Capital International
(MSCI).
|
Equity Indices |
|
|
EAFE: |
MSCI Europe, Australasia, and Far East Index |
|
Europe Ex-U.K.: |
MSCI Europe ex-U.K. Index |
|
Far East Ex-Japan: |
MSCI AC Far East ex-Japan Index |
|
Latin America: |
MSCI Emerging Markets Latin America Index |
|
Emerging Markets: |
MSCI Emerging Markets Index |
|
Bond Indices |
|
|
Developed Markets: |
J.P. Morgan Global Government Bond Less U.S. Index |
|
Emerging Markets: |
J.P. Morgan Emerging Markets Bond Index Plus |
All charts are for illustrative purposes only and do not represent the
performance of any specific security. Past
performance cannot guarantee future results.