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by William Pometto and Karl C. Mergenthaler, CFA
J.P. Morgan Investment Analytics & Consulting
william.x.pometto@jpmorgan.com, karl.c.mergenthaler@jpmorgan.com
AS OF JULY 2009
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U.S. EQUITY
- U.S. equities posted solid returns in the second quarter, and tacked on additional gains in July. U.S. equity indices are in positive territory on a year-to-date basis.
- Small Cap Growth stocks were the strongest performers on a year-to-date basis with the Russell 2000 Growth index posting a 19.45% gain through July.
- U.S. stocks were led by high-beta sectors, with the largest gains coming in the Financials, Technology, and Consumer Discretionary groups.
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FIXED INCOME
- The Barclays Aggregate Index posted a gain of 1.61% in July, and remained in positive territory for the year.
- The U.S. Treasury yield curve steepened dramatically in the second quarter, with longer-term spreads increasing from 194 b.p. as of March to 244 b.p, as of June.
- High Yield fixed income enjoyed solid gains with the M.L. High Yield Index posting a 37.3% on a year-to-date basis.
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INTERNATIONAL EQUITY
- International equities generated strong returns in the second quarter, with the MSCI EAFE posting a 25.4% return. This index is up 17.8% on a year-to-date basis.
- Emerging market equities posted the largest gains, with the MSCI Emerging Markets index generating a 51.64% gain on a year-to-date basis.
- The strong results in emerging markets were led by China and India.
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REAL ESTATE AND OTHER
- The NAREIT Index generated a gain of 28.85% in the second quarter.
- In the U.S., median home prices and housing starts are down materially from their recent peaks.
- The Goldman Sachs Commodities Index kept pace with a 19.24% gain for the second quarter.
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