Market Commentary: The final week of 2007 came and went, reducing the value of equity markets in the process. The rally that began in late November did not extend past December 10 for most equities. It now looks like another test of the August lows is not out of the question.
The bond market was strong this past week with the 10-year Treasury yield closing today at 3.90%. Today’s release of the minutes from the December 11 FOMC meeting indicate that the Fed is prepared to take further action if economic conditions worsen.
Sectors: The year 2007 ended with Energy, Materials, Consumer Staples, and Utilities showing positive momentum while Financials, Consumer Discretionary, and Telecom are exhibiting negative momentum. Technology, Health Care, and Industrials are relatively flat.
Styles: Most entries in our style rankings ended the year with negative momentum. Large Cap Growth remains on top of the heap and is the only style sporting positive momentum at this time. Still, it is dangerously close to flipping to the negative side.
International: Relative strength in Latin America helped that category end the year at the top of our global rankings. Dollar weakness resurfaced the past few weeks, especially relative to the euro and the yen. That gave a year-end boost to European Union markets, but the weakness in Japanese equity markets proved too much of a burden for yen strength to overcome. The Japanese market peaked in late 1989, and the Tokyo Nikkei is still about 60% below its high of 18 years ago. Markets rotate, and one of these years, we expect to see Japan at the top of our rankings.
The bond market was strong this past week with the 10-year Treasury yield closing today at 3.90%. Today’s release of the minutes from the December 11 FOMC meeting indicate that the Fed is prepared to take further action if economic conditions worsen.
Sectors: The year 2007 ended with Energy, Materials, Consumer Staples, and Utilities showing positive momentum while Financials, Consumer Discretionary, and Telecom are exhibiting negative momentum. Technology, Health Care, and Industrials are relatively flat.
Styles: Most entries in our style rankings ended the year with negative momentum. Large Cap Growth remains on top of the heap and is the only style sporting positive momentum at this time. Still, it is dangerously close to flipping to the negative side.
International: Relative strength in Latin America helped that category end the year at the top of our global rankings. Dollar weakness resurfaced the past few weeks, especially relative to the euro and the yen. That gave a year-end boost to European Union markets, but the weakness in Japanese equity markets proved too much of a burden for yen strength to overcome. The Japanese market peaked in late 1989, and the Tokyo Nikkei is still about 60% below its high of 18 years ago. Markets rotate, and one of these years, we expect to see Japan at the top of our rankings.
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