Hard to Find a Safety Zone in the Market

Lately, it’s been hard to find a safety zone in the markets. Most key classes are down for the YTD, 4-week and 2-week periods. Only commodities, oil in particular, have been bright spots.

The following charts use these ETFs as proxies for key asset classes:

• (VTI) US stock market
• (EFA) non-US developed stock markets
• (EEM) non-US emerging stock markets
• (VNQ) US equity REITs
• (DJP) global commodities*
• (USO) oil alone
• (AGG) US aggregate bond market

* DJP represents the DJ-AIG Commodity Index which is a “balanced” index. It limits any one of the 19 commodities it follows to a 15% weight, and any of the 5 commodity groups to a 33% weight. Since oil has been the overwhelming performer lately, DJP underweights oil in comparison to its world significance. The S&P GSCI Commodity index represents its commodities on a world production basis. For a more detailed discussion of commodity index composition and performance differences, see our article on that topic.

YTD chart:

REITs were slightly positive for the YTD period after an encouraging period in March and April, but they have since faded.

4-week (20-day) chart:

2 week (10-day) Chart: