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by Karl C. Mergenthaler, CFA, William Pometto and Stacey Parke
karl.c.mergenthaler@jpmorgan.com, william.x.pometto@jpmorgan.com, stacey.l.parke@jpmorgan.com
AS OF OCTOBER 2011
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U.S. EQUITY
- The S&P 500, along with other major U.S. stock indexes, experienced significant volatility in recent months, largely attributable to concerns about the European sovereign debt crises.
- On a year-to-date basis, growth stocks have outperformed value stocks.
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FIXED INCOME
- The Merrill High Yield index has produced strong performance recently, gaining 5.88% in October. High yield corporate debt spreads remain high amid concerns about the health of the global economy.
- The Barclay’s U.S. Aggregate index has generated a return of 6.76% for the year through October. The U.S. government continues to drive down yields at all durations along the yield curve, with the 10-year U.S. Treasury yield hovering around 2%.
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INTERNATIONAL EQUITY
- The MSCI EAFE Index was down 6.78% for the year through the end of October.
- Although the MSCI Emerging Market Index has declined by 11.27% year-to-date, emerging market equities have produced impressive returns in the 3, 5, and 10 year periods through October 2011.
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REAL ESTATE AND OTHER
- The NAREIT index was up 7.36% year-to-date, a relatively low return considering its strong historical performance.
- U.S. GDP growth for the third quarter was higher than expected, with real output increasing to 2.5%, up from 1.3% in Q2. The unemployment rate dropped to 9.0%, slightly easing fears of a recession and hinting towards a healthier job market.
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