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Weekly Recap | June 27, 2022

Weekly Recap | June 27, 2022

June 27, 2022
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Weekly Recap

June 20-24, 2022 Recap

Best Week in a Month

Recession Fears Subside
U.S. stocks rebounded from three weeks of declines as equity sentiment was bolstered by comments from Fed officials while a reading on inflation expectations eased. St. Louis Fed President Bullard said worries over a U.S. recession are overblown, even after Fed Chairman Powell intensified his resolve to cool inflation with aggressive interest rates in testimony to Congress. The S&P 500 surged over 3% on Friday, to cap its second-strongest weekly gain of the year.

For the Week…
The S&P 500 surged 6.46%, its best (and only) weekly gain since a 6.6% rally for the week ending May 27. The Dow Jones Industrial Average gained over 800 points for a 5.39% advance while the tech-heavy Nasdaq Composite rallied the most, up 7.51%.

New Home Sales Jump
U.S. new home sales climbed by 10.7% to an annualized pace of 696,000 in May (587,000 expected). New home sales are still down 5.9% from a year ago. Even as the supply of new homes for sale fell 7.2% last month, the median sales price declined to $449,000 from a record-setting $454,700 the month prior.

Consumer Discretionary Outperforms
All but one of 11 major sector groups posted gains last week with Consumer Discretionary (+8.25%), Healthcare (+8.17%) and Real Estate (+7.79%) at the top of the leaderboard. Industrials (+4.24%) and Materials (+2.70%) gained the least, while Energy (-1.55%) was the only declining sector. Energy (+31.95%) is still this year’s top performing sector.

Treasury Yields Decline
Treasury security prices rebounded last week, trimming yields. The yield on 10-year Treasury notes eased to 3.125% from 3.236% the week prior. Separately, the U.S. Dollar Index weakened by 0.49% for its first weekly pullback since May 27. Despite intra-week volatility, U.S. WTI crude oil futures were little changed on the week, ending at $107.62.

The Latest from @CeteraIM

Inflation Expectations Decline

First Year of Bull Market Starts are Strongest

Have Treasury Yields Peaked?

Economic Calendar

Monday, June 27
Durable & Capital Goods Orders, Pending Home Sales.

Tuesday, June 28
Goods-only Trade Balance, S&P Case-Shiller Home Prices, Consumer Confidence.

Wednesday, June 29
Mortgage Activity, 1Q Final GDP, Personal Consumption, GDP Prices.

Thursday, June 30
Jobless Claims, Personal Income & Spending, PCE Prices, MNI Chicago PMI.

Friday, July 1
ISM & S&P Global US Manufacturing, Construction Spending.

The auto sector is still dealing with inventory issues, but other retail sectors have been able build inventory levels. Retail inventories (ex. Autos) have increased by 19.8% over the last year, as of April. While the inventories/sales ratio has risen to the highest level since May 2020, it is still below pre-pandemic levels, though that gap is closing.

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
Cetera Investment Management LLC is an SEC registered investment adviser owned by Cetera Financial Group®. Cetera Investment Management provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers.

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), Cetera Financial Specialists LLC, and First Allied Securities, Inc. All firms are members FINRA / SIPC. Located at 655 W. Broadway, 11th Floor, San Diego, CA  92101.

Disclosures
Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

The material contained in this document was authored by and is the property of Cetera Investment Management LLC. Cetera Investment Management provides investment management and advisory services to a number of programs sponsored by affiliated and non-affiliated registered investment advisers. Your registered representative or investment adviser representative is not registered with Cetera Investment Management and did not take part in the creation of this material. He or she may not be able to offer Cetera Investment Management portfolio management services.

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No independent analysis has been performed and the material should not be construed as investment advice. Investment decisions should not be based on this material since the information contained here is a singular update, and prudent investment decisions require the analysis of a much broader collection of facts and context. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The opinions expressed are as of the date published and may change without notice. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision.

All economic and performance information is historical and not indicative of future results. Investors cannot directly invest in unmanaged indices. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards.

Glossary

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.