STOCK INDEX PERFORMANCE
Index Week YTD 12-mo. 2007 5-yr.
DOW JONES 30 (8379) -5.31% -35.47% -37.07% 8.88% -0.36%
S&P 500 (877) -6.76% -39.24% -40.89% 5.49% -1.30%
NASDAQ 100 (1202) -8.34% -42.13% -44.79% 19.24% -2.19%
S&P 500/Citigroup Growth -6.46% -38.18% -38.99% 9.25% -2.37%
S&P 500/Citigroup Value -7.09% -40.34% -42.83% 2.03% -0.25%
S&P MidCap 400/Citigroup Growth -9.68% -41.85% -43.10% 13.55% -0.94%
S&P MidCap 400/Citigroup Value -9.60% -39.84% -42.41% 2.84% 1.02%
S&P SmallCap600/Citigroup Growth -10.53% -36.65% -40.49% 5.66% 1.39%
S&P SmallCap600/Citigroup Value -11.22% -34.94% -39.09% -5.19% 1.50%
MSCI EAFE -9.75% -47.92% -48.65% 11.76% 2.61%
MSCI World (ex US) -9.75% -47.76% -48.54% 13.04% 2.98%
MSCI World -8.31% -43.83% -44.96% 9.69% 0.73%
MSCI Emerging Markets -16.53% -61.18% -61.63% 39.23% 5.67%
Returns are total returns. The 5-yr. return is an average annual.
One-week,YTD, 12-mo. and 5-yr. performance returns calculated through 10/17/08.
S&P SECTOR PERFORMANCE
Index Week YTD 12-mo. 2007 5-yr.
Consumer Discretionary -10.18% -40.43% -45.98% -13.21% -6.69%
Consumer Staples -5.03% -20.23% -17.47% 14.36% 4.16%
Energy -2.28% -40.47% -37.70% 34.41% 14.16%
Financials -10.46% -50.95% -56.28% -18.52% -9.72%
Health Care -3.47% -26.35% -26.38% 7.32% -0.09%
Industrials -7.85% -43.02% -44.84% 12.04% -0.41%
Information Technology -9.20% -42.50% -43.72% 16.30% -4.07%
Materials -11.08% -46.54% -46.72% 22.53% 1.68%
Telecom Services -5.31% -41.73% -43.94% 11.88% 2.14%
Utilities -0.78% -33.83% -29.43% 19.38% 8.25%
Returns are total returns. The 5-yr. return is an average annual.
One-week, YTD, 12-mo. and 5-yr. performance returns calculated through 10/17/08.
BOND INDEX PERFORMANCE
Index Week YTD 12-mo. 2007 5-yr.
U.S. Treasury: Intermediate 0.82% 5.85% 8.36% 8.83% 4.41%
GNMA 30 Year 0.79% 3.45% 5.16% 6.97% 4.79%
U.S. Aggregate 0.71% -0.64% 0.83% 6.97% 3.68%
U.S. Corporate High Yield -1.23% -25.33% -26.74% 1.88% 0.22%
U.S. Corporate Investment Grade 0.86% -13.64% -13.58% 4.56% 0.49%
Municipal Bond: Long Bond (22+) 11.16% -11.25% -12.23% 0.46% 2.21%
Global Aggregate -0.07% -2.66% -0.93% 9.48% 4.23%
Returns include reinvested interest.The 5-yr.return is an average annual.
One-week,YTD, 12-mo. and 5-yr. performance returns calculated through 10/17/08.
KEY RATES
As of 10/24
Fed Funds 1.50% 5-YR CD 3.88%
LIBOR (1-month) 3.53% 2-YR Note 1.53%
CPI - Headline 4.90% 5-YR Note 2.60%
CPI - Core 2.50% 10-YR T-Bond 3.70%
Money Market Accts. 2.45% 30-YR T-Bond 4.31%
Money Market Funds 1.53% 30-YR Mortgage 5.78%
6-mo. CD 3.06% Prime Rate 4.50%
1-YR CD 3.59% Bond Buyer 40 5.54%
WEEKLY FUND FLOWS
Week of 10/22 Previous
Equity Funds $686 M -$9.9 B
Including ETF activity, Domestic funds reporting net inflows of
$499 M and Non-domestic funds reporting net inflows of $187 M.
Bond Funds -$2.6 B -$12.6 B
Municipal Bond Funds -$1.126 B -$2.285 B
This is the second largest net outflow on record as the three largest
weekly net outflows have been reported consecutively in October.
Money Markets $17.151 B $58.240 B
General MM funds report net inflows totaling $5.718 B and Government
MM funds report net inflows of $11.433 B.
MARKET INDICATORS
As of 10/17
TED Spread: Investment Grade Spread: High Yield Spread (BB):
266 580 bps 940 bps
FACTOIDS FOR THE WEEK OF OCTOBER 20TH - OCTOBER 24TH
Monday, October 20, 2008
On October 14, 29 U.S. and 185 foreign companies ($500 million or more)
closed trading with a market cap below their respective cash holdings,
according to analysis by BusinessWeek. A sign the equities markets could be
oversold. In October 2002, the bottom of the last bear market, 14 U.S. and 77
foreign companies found themselves in the same predicament. For the 12-
month period following the end of the bear market in 2002, those 14 U.S.
companies returned an average of 66%, vs. 29% for the S&P 500.
BusinessWeek did not list the companies from the 14th but did note that UAL,
General Motors and Morgan Stanley were among the 29 U.S. firms.
Tuesday, October 21, 2008
The U.S. government’s decision to inject $250 billion into the banking system
may impact smaller banks differently than their larger counterparts. Nine of the
largest banks will automatically receive a combined $125 billion in return for
preferred stock paying 5% for the first five years. After five years the rate
adjusts to 9%. The goal is for the banks to repay the government within five
years. The yields on the publicly traded preferred stock shares of these nine
banks currently range from 7.75% to 11.80%, according to J.P. Morgan
Securities, Inc. So banks should be able to earn a nice spread on a 5% loan.
Smaller banks can tap into the remaining $125 billion. These institutions,
however, are concerned they could be stigmatized as financially weak if they
participate.
Wednesday, October 22, 2008
Health care stocks tend to perform better than the broader indices during bear
markets because demand for their products is not cyclical, so the sector is
regarded as defensive in nature. From 10/9/07-10/21/08, the S&P Health Care
Index declined 23.7%, vs. -37.6% for the S&P 500. The S&P Health Care
Index is off more than usual due to the 47.2% hit to the managed care
companies. Since they are the providers of health insurance, they are
experiencing greater scrutiny in this election year. Investors should not ignore
innovation as a potential driver of this sector. For example, there are currently
334 drug compounds in the final stages of clinical testing, up 24% from 2002,
according to IMS Health.
Thursday, October 23, 2008
The freeze-up in the credit markets has driven corporate spreads to extreme
levels in a relatively short period of time. Currently, Baa-rated corporates (low
end of investment-grade) yield over 400 basis points above Treasuries,
eclipsing the record set in 2002, according to SmartMoney.com. Speculativegrade
corporates (junk bonds) currently offer a record 1,400 basis points over
Treasuries, well above the 1,000 basis points normally associated with a
distressed climate.
Friday, October 24, 2008
Small-cap stocks are off 35.3% this year through yesterday’s close, as
measured by the Russell 2000 Index. The index’s forward-looking P/E is 22,
an 80% discount to where it stood a year ago, according to Birinyi Associates.
Based on price-to-book, this is the cheapest the index has been in 10 years,
according to Citigroup. If the U.S. is fortunate enough to experience a “V”
shaped recovery, investors should consider owning small-caps since they tend
to perform well in the early stages of an economic cycle.
The above was gathered by and posted from
FIRST TRUST ADVISORS L.P. • APPROVED FOR PUBLIC USE • 10/27/08
Web link to this and all previous weekly information is
here
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