Weekly Recap | November 6, 2023

October 30 - November 3, 2023 Recap

Best Week of the Year

S&P 500 Erases Prior Two-Weeks of Losses
All three major U.S. equity indexes posted their strongest weekly gains of the year after economic data boosted hopes that the Federal Reserve may be done raising interest rates. On November 1, Fed policymakers held interest rates unchanged at 5.25%-5.50% for their second straight meeting and third “rate pause” of the year. After the S&P 500 was in correction status two weeks ago (-10.3% below its 2023 peak on July 31), the index has now cut the pullback to -5.0%.

For the Week…
The S&P 500 surged 5.88% after falling a cumulative 4.84% during the prior two weeks. The Dow Jones Industrial Average rose a lesser 5.07%, while the tech-heavy Nasdaq Composite leapt 6.62%. By market capitalization, small caps gained the most, with the Russell 2000 up 7.59%.

Soft October Payrolls
October nonfarm payrolls increased by 150,000 in October, shy of forecasts for 170,000 and well below September’s downwardly revised job gains of 279,000 (336,000 previously reported). Job gains were primarily in healthcare (+58K), government (+51K), and social assistance (+19K), while employment declined in manufacturing were largely due to worker strike activity. The unemployment rate rose to 3.9% from 3.8%.

Weekly Sector Insights
All 11 S&P 500 sectors ended positive last week, with Real Estate posting the strongest gain, up 8.57%. Financials (+7.45%), Consumer Discretionary (+7.23%), and Technology (+6.85%) were the next best performers while Healthcare (+3.48%), Consumer Staples (+3.28%), and Energy (+2.35%) gained the least. Communication Services and Technology are back up over 40% year-to-date, up 43.65% and 41.42% respectively.

Treasury Prices Rally, Yields Drop
Treasury prices rallied on hopes the Fed may be done raising interest rates. The yield on 10-year Treasury notes ended Friday at 4.523%, down 0.30% for the week, and down over 0.41% from the week ending October 20.

The Latest from @CeteraIM

Q3 Earnings Scorecard

Fed Leaves Interest Rates Unchanged

Layoffs Drop

Economic Calendar

Monday, November 6
No Major Releases.

Tuesday, November 7
U.S. Trade Deficit, Consumer Credit.

Wednesday, November 8
Mortgage Activity, Wholesale Inventories.

Thursday, November 9
Jobless Claims.

Friday, November 10
Veterans Day (observed federal holiday, Markets open), No Major Releases.

Wage growth is easing from high levels, but labor supply remains low compared to demand. Job openings increased by 56,000 to 9.55 million in September. There are 1.5 job openings per unemployed job seeker. The long-term average is 0.67 job openings per unemployed job seeker.

^{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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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.}

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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.}