Week Ended November 12, 2010
Stocks broke a five-week
winning streak and ended lower. Investors appeared concerned about the G-20
meeting taking place in Korea and the rift that appeared to be developing
between the U.S. and some of its trading partners. Politicians and central
bankers in Europe, Asia, and Latin America have expressed displeasure with the
Federal Reserve's recent decision to undertake another round of quantitative
easing. Many fear that the additional liquidity created might flow to emerging
markets and result in asset bubbles and that a falling U.S. dollar will make
other countries' exports less competitive. The U.S. dollar gained against the
euro during the week, however, as rising yields on Irish sovereign debt renewed
fears about problems in European credit markets. The dollar's rise weighed on
stocks by threatening one of the key tailwinds behind market gains in recent
weeks, as investors have generally welcomed the declining dollar and the boost
it gives U.S. exports. Worries over a poor profit outlook technology giant
Cisco, whose fortunes have often been an accurate bellwether of broader
technology trends, took a particularly large toll on the technology-heavy
Nasdaq. Stocks took a decisive turn lower to end the week, apparently in
response to speculation that China would take measures to slow its growth in
order to cool inflation. Materials and energy producers took the largest hit in
response to concerns that commodity demand might slacken.
|
U.S.
Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
11192.58 |
-251.50 |
7.33% |
|
S&P
500 |
1199.21 |
-26.64 |
7.54% |
|
NASDAQ
Composite |
2518.21 |
-60.77 |
10.98% |
|
S&P
MidCap 400 |
843.87 |
-17.22 |
16.13% |
|
Russell
2000 |
720.30 |
-15.87 |
13.60% |
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 November 12,
2010
Commodity prices continued
to soar during the week. The prices of gold and cotton reached new highs,
fueled by Chinese demand and the Federal Reserve's announcement that it would
inject more money into the economy on top of its earlier stimulus programs. The
price of cotton has already doubled so far this year, gold is up almost 30%
over the same period, and soybeans, copper, and crude oil have all advanced
significantly. Investors have been flooding into hard assets in anticipation of
a possible spike in inflation down the road. Against this backdrop, President
Obama returned empty-handed from a new round of trade talks in Seoul, South
Korea. He had hoped to achieve an agreement on a unified approach to
stimulating global economic growth, as well as a free trade pact with South
Korea. He was rebuffed on all fronts by members of the so-called Group of 20,
most of whom voiced serious differences with his economic policies, according
to reports in the New York Times and The Wall Street Journal. Our
key trading partners accused the U.S. of deliberately debasing the dollar to
gain a trading advantage and not taking strong enough measures to address our
yawning budget deficit. Great Britain, France, Germany, and others have already
initiated austerity programs of their own. Treasury prices fell during the week
and yields moved higher (prices and yields move counter to each other).
|
U.S. Treasury Yields1 |
||
|
Maturity |
November 12, 2010 |
November 5, 2010 |
|
2-Year |
0.50% |
0.37% |
|
10-Year |
2.77% |
2.54% |
|
30-Year |
4.26% |
4.12% |
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, November 12, 2010.
___________
Week Ended November 5, 2010
International
Stocks
Foreign stock markets closed higher for the week ending November
5, 2010 with the broad international measure, the MSCI EAFE Index (Europe,
Australasia, and Far East), gaining 3.46%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
3.46% |
8.77% |
|
Europe ex-U.K. |
2.47% |
5.70% |
|
Denmark |
2.54% |
29.82% |
|
France |
3.24% |
3.04% |
|
Germany |
3.19% |
11.07% |
|
Italy |
-0.03% |
-6.47% |
|
Netherlands |
3.24% |
5.29% |
|
Spain |
-3.20% |
-12.66% |
|
Sweden |
2.53% |
29.28% |
|
Switzerland |
4.69% |
12.40% |
|
United
Kingdom |
5.04% |
12.01% |
|
Japan |
2.12% |
7.42% |
|
AC
Far East ex-Japan |
5.25% |
20.75% |
|
Hong Kong |
7.56% |
29.26% |
|
Korea |
5.35% |
20.54% |
|
Malaysia |
1.33% |
35.13% |
|
Singapore |
3.66% |
22.55% |
|
Taiwan |
4.19% |
11.93% |
|
Thailand |
9.09% |
64.01% |
|
EM
Latin America |
3.87% |
16.14% |
|
Brazil |
4.17% |
9.02% |
|
Mexico |
3.31% |
22.27% |
|
Argentina |
8.91% |
77.44% |
|
EM
(Emerging Markets) |
4.56% |
19.47% |
|
Hungary |
0.13% |
4.85% |
|
India |
5.14% |
26.43% |
|
Israel |
0.49% |
0.32% |
|
Russia |
1.94% |
9.63% |
|
Turkey |
5.56% |
46.64% |
International
Bond Markets
International bond markets in developed countries were higher
this week, with the J.P. Morgan Global Government Bond Less U.S. Index gaining
0.27%
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed
Markets |
0.27% |
10.72% |
|
Europe |
|
|
|
Denmark |
1.74% |
8.92% |
|
France |
1.51% |
5.93% |
|
Germany |
1.62% |
6.30% |
|
Italy |
0.70% |
1.21% |
|
Spain |
-0.22% |
-1.68% |
|
Sweden |
2.50% |
14.73% |
|
United
Kingdom |
1.99% |
9.39% |
|
Japan |
-1.00% |
17.84% |
|
Emerging
Markets |
1.00% |
17.70% |
|
Argentina |
3.05% |
41.83% |
|
Brazil |
-0.14% |
15.72% |
|
Bulgaria |
1.37% |
9.49% |
|
Russia |
1.47% |
13.09% |
International
Currency Markets
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 |
81.350 |
0.98% |
-14.44% |
|
Euro |
1.40321 |
-0.96% |
2.20% |
|
British
pound |
1.62091 |
-1.38% |
-0.37% |
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.