Weekly Recap | January 30, 2023

January 23-27, 2023 Recap

Equities Extend Gains

Stocks Rebound
U.S. stocks rebounded week-over-week with the benchmark S&P 500 ending Friday with its best YTD performance of the new year, posting gains in three of past four weeks. A tad stronger than forecast GDP report along with mixed-to-improving corporate earnings drove investor sentiment positive last week, although tempered by a 0.3% increase in December core personal-consumption expenditure (PCE) prices, up sequentially from a 0.2% November rise.

For the Week…
The S&P 500 advanced 2.48%, the Dow Jones Industrial Average rose 1.81% and the tech-heavy Nasdaq Composite jumped 4.32%. Bonds had another winning week with the Bloomberg U.S. Aggregate Bond Index climbing 0.09% after a 0.15% prior week gain, extending its YTD gain to 2.99%.

Existing Home Sales Fall
U.S. GDP (the sum of all goods and services) grew at a 2.9% pace during the fourth quarter of 2022. For the full year, U.S. GDP grew at a 2.1% annual pace. Durable-goods orders increased by 5.6% last month (+2.4% estimate) for its biggest monthly gain since July 2020. Meanwhile, the U.S. job market remain resilient, as weekly jobless claims fell to 187,000, the lowest level since April 2022.

Consumer Discretionary Shines Bright
Nine of the 11 major S&P 500 sector groups posted gains last week, led by Consumer Discretionary (+6.40%), Technology (+4.07%) and Communication Services (+3.28). Consumer Staples (+0.45%) rose the least, while Healthcare (-0.84%) and Utilities (-0.49%) lagged.

Treasury Yields Rebound
Treasury yields rebounded last week after slipping the prior three weeks. The yield on benchmark 10-year notes rose to 3.521% from 3.483%. U.S. WTI crude oil futures declined 2.4% last week, closing Friday at $79.68/barrel.

The Latest from @CeteraIM

Personal Incomes Rise

Consumer Spendings Slows

Housing Detracts from GDP

Economic Calendar

Monday, January 30
Dallas Fed Regional Manufacturing Activity.

Tuesday, January 31
Employment Costs, S&P Case-Shiller Home Prices, Chicago-area PMI, Consumer Confidence, FOMC Policy Meeting Begins.

Wednesday, February 1
Mortgage Activity, ADP Private Jobs, ISM and S&P Manufacturing PMIs, JOLTS Job Openings, Construction Spending, FOMC Rate & Policy Decisions.

Thursday, February 2
Jobless Claims, Labor Productivity/Costs, Factory Orders.

Friday, February 3
Nonfarm Payrolls, Unemployment Rate, ISM and S&P Services PMIs.

The pace of economic growth slowed to 2.1% last year, but the economy avoided a recession. Growth eased from a 37-year high of 5.9% in 2021. High inflation eroded real GDP growth, though real economic growth was only slightly less than the average from the prior decade (+2.2%).

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

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^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.}