The Markets At Mid Year 2006
Tuesday, July 04, 2006Commodities | Real Estate | Stock Market | Mutual Funds
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The financial markets certainly took investors on a roller-coaster ride in the first half of 2006. The Stock Market was just one example: after getting close to an all-time high on May 10, the Dow Jones Industrial Average then plummeted -- to register its worst May in twenty years. Rising interest rates also led many of the nation's real estate markets to start cooling off.
Because Independence Day comes just after the year's halfway point, NBR's holiday special edition "takes stock" of the various financial markets. Correspondent Suzanne Pratt analyzes developments in equities trading during the January-June period, followed by a report by Midwest Bureau Chief Diane Eastabrook on the performance of oil, gold and other commodities. Anchor Paul Kangas then interviews Morningstar's Director of Mutual Fund Analysis, Christine Benz, about the performance of mutual funds in the year's second quarter.
Turning to real estate, Correspondent Jeff Yastine examines trends in various regional markets. Then Paul Kangas discusses with noted Yale Professor Robert Shiller whether the nation has indeed gone through a real estate "bubble."
Looking ahead, Anchor Susie Gharib talks with a panel of Wall Street money managers and analysts about what investors can expect in the year's second half.
So before you head off to the fireworks -- let NBR shed some light on what’s fueling the explosive trading action on markets worldwide!
NBR's Diane Eastabrook Reports On Commodities Prices
Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. He was featured in NBR's special program, "The Markets At Mid Year 2006". For more information on the topics he discussed, try these resources:
Book: "Irrational Exuberance" by Robert Shiller. You can find out more information about this book from Dr. Shiller's web site: http://www.irrationalexuberance.com/ or from booksellers like Amazon.com.
Speech: "Asset Prices, Monetary Policy, and Bank Regulation" by Robert Shiller. This is the text of his keynote address at the 42nd Annual Conference on Bank Structure and Competition, “Innovations in Real Estate Markets: Risks, Rewards and the Role of Regulation,” Federal Reserve Bank of Chicago, May 19, 2006
Article: "US Home Prices Rising At A Slower Pace"
In this Marketwatch article by Rex Nutting, it is reported that U.S. home prices rose at the slowest pace in two years in the first quarter of 2006, as some once-hot markets in California saw prices fall.Article: "Economist Says US Housing Boom Is Biggest Since 1890"
Amy Hoak of Marketwatch writes that the recent housing boom is the biggest the United States has ever recorded, but its underlying reasons may have been psychological, and that new data suggest the market might be at the end of a cycle.Study: "Housing Prices in America" by Global Insights/National City, June 2006
This study explains that overvaluation of real estate, which was insignificant in 2004, become more pervasive in the first quarter of 2006, particularly in coastal states like California and Florida.
Stock Averages -- First Half 2006
| DJIA | 11,150.22 | +4.0% |
| S&P 500 | 1,270.20 | +1.8% |
| NASDAQ | 2,172.09 | -1.5% |
Results as of 6/30/06 close.
Top Fund Categories -- 2nd Quarter
| FUND CATEGORY | GAIN |
| Bear Market | +4.9 |
| Utilities | +3.1 |
| Long-Short | +1.7 |
| Ultrashort Bond | +0.7 |
| World Bond | +0.9 |
source: Morningstar. Results through 6/29/06.
Top Funds -- 2nd Quarter
| FUND NAME | SYMBOL | GAIN |
| ProFunds UltraShort OTC | USPIX | +16.5 |
| Rydex Inverse Dynamic OTC | RYVNX | +16.2 |
| ProFunds UltraShort Sm.Cap | UCPIX | +13.7 |
| Rydex Inverse OTC | RYAIX | +8.7 |
| Rydex Inverse Russell 2000 | RYSHX | +7.6 |
source: Morningstar. Results through 6/29/06.
Top Fund -- 1 Year
| US Global Inv Wld Prec Min | UNWPX | +51.7 |
source: Morningstar. Results through 6/29/06.
Top Fund -- 3 Years
| US Global Inv Global Resources | PSPFX | +57.7 (annualized) |
source: Morningstar. Results through 6/29/06.
Largest Funds
| FUND NAME | SYMBOL | GAIN/LOSS |
| Growth Fund of America | AGTHX | -2.0 |
| Vanguard 500 Index | VFINX | -1.2 |
| PIMCO Total Return A | PTTAX | -0.7 |
| EuroPacific Growth A | AEPGX | -2.2 |
| Invmt Co of American | AIVSX | +1.3 |
source: Morningstar. Results through 6/29/06.
