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Weekly Recap | April 24, 2023

Weekly Recap | April 24, 2023

April 25, 2023
Weekly Recap

April 17-21, 2023 Recap

Equities Slip Fractionally

Small Cap and Defensive Stocks Perform Best
Stocks struggled last week as slowing economic data heightened fears about a potential recession. Additionally, Federal Reserve officials signaled that further rate hikes could still be needed to ease inflation. The S&P 500 has fluctuated by less than 1% for a third straight week. Outperformers included defensive stocks, including flight-to-safety groups like grocers and discount retailers together with homebuilders. This week marks the busiest week of the first quarter earnings season with 175 S&P 500 companies scheduled to release results.

For the Week…
The S&P 500 fell just 0.09% after climbing 0.82% the week prior. The Dow Jones Industrial Average fell 0.23% and the tech-heavy Nasdaq Composite declined the most, down 0.42%. Small caps performed best a second week, with the Russell 2000 up 0.59% in which Growth (+0.95%) again led Value (+0.19%).

Leading Indicators Drop
The Conference Board’s closely watched Leading Economic Index (LEI) fell 1.2% to 108.4 in March (its lowest level since November 2020) and follows a 0.5% decline in February. From a year ago the LEI is down 7.8%. Going back to 1960, this indicator has never declined this much year-over-year outside of a recession. Leading indicators are signaling economic weakness in the months ahead.

Defensive Stocks Outperform
Six of the 11 S&P 500 sector groups posted gains last week, led by Consumer Staples (+1.79%), Real Estate (+1.59%), and Utilities (+1.09%). Communication Services, which remains this year’s biggest sector gainer (+20.52% YTD), fell the most last week, down 3.05%. Energy (-2.53%) and Technology (-0.46%) were the next largest decliners last week.

Treasury Yields Little Changed
Financial markets are pricing in around 90% odds for a 0.25% Fed rate hike when policymakers meet next week on May 2-3. The yield on benchmark 10-year yield Treasury notes ended the week at 3.54%, (up just 0.02% week-over-week). 

The Latest from @CeteraIM

Early Q1 Earnings Insights

Jobless Claims Inch Higher

Philly-Region Manufacturing Slumps Further  

Economic Calendar

Monday, April 24
Chicago Fed National Activity.

Tuesday, April 25
S&P Case-Shiller Home Prices, New Home Sales, Consumer Confidence.

Wednesday, April 26
Mortgage Activity, Durable Goods Orders, Advance Goods-only Trade Balance, Retail/Wholesale Inventories.

Thursday, April 27
Jobless Claims, Q1 GDP, Pending Home Sales.

Friday, April 28
Personal Incomes/Spending, PCE Index, PCE Prices, Chicago Business Barometer, Consumer Sentiment.

Imports into the Ports of Los Angeles and Long Beach have slowed significantly. The 12-month average of inbound shipping containers is 18% lower than the peak in August 2021. It’s also lower than the pre-pandemic peak as consumer spending is shifting back to services.

This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on Twitter.

About Cetera® Investment Management
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About Cetera Financial Group
“Cetera Financial Group” refers to the network of independent retail firms encompassing, among others, Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), and Cetera Financial Specialists LLC. All firms are members FINRA / SIPC. Located at 655 W. Broadway, 11th Floor, San Diego, CA  92101.

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The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.

The S&P 500 is an index of 500 stocks chosen for market size, liquidity and industry grouping (among other factors) designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.

The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad based index

The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.

The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe and is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership.

The Bloomberg US Aggregate Bond Index, which was originally called the Lehman Aggregate Bond Index, is a broad based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government–related and corporate debt securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency) debt securities that are rated at least Baa3 by Moody’s and BBB- by S&P. Taxable municipals, including Build America bonds and a small amount of foreign bonds traded in U.S. markets are also included. Eligible bonds must have at least one year until final maturity, but in practice the index holdings have a fluctuating average life of around 8.25 years.

The Bloomberg US Corporate High Yield Index measures the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. Payment-in-kind and bonds with predetermined step-up coupon provisions are also included. Eligible securities must have at least one year until final maturity, but in practice the index holdings has a fluctuating average life of around 6.3 years.

The Bloomberg US Municipal Bond Index covers the USD-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. Eligible securities must be rated investment grade (Baa3/BBB- or higher) by Moody’s and S&P and have at least one year until final maturity.

The MSCI EAFE Index is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.

The MSCI Emerging Markets Index is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.

The Bloomberg Commodity Index is a broadly diversified index that measures 22 exchange-traded futures on physical commodities in five groups (energy, agriculture, industrial metals, precious metals, and livestock), which are weighted to account for economic significance and market liquidity. No single commodity can comprise less than 2% or more than 15% of the index; and no group can represent more than 33% of the index.

The S&P GSCI Crude Oil Index is a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market.

The S&P GSCI Gold Index, a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark tracking the COMEX gold futures market.

The U.S. Dollar Index is a weighted geometric mean that provides a value measure of the United States dollar relative to a basket of major foreign currencies. The index, often carrying a USDX or DXY moniker, started in March 1973, beginning with a value of the U.S. Dollar Index at 100.000.