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Weekly Recap | October 4, 2021

Weekly Recap | October 4, 2021

| October 05, 2021
Weekly Recap

September 27 - October 1, 2021 Recap

Largest Weekly Pullback in Seven Months

Stocks Down Third Week in Four
Despite a Friday bounce back above its 100-day moving average, the S&P 500 posted its largest weekly loss in seven months. The week-ending support restoration was a major, albeit tentative, relief for investors as the moving average has reliably kept selloffs at bay for a decade. Friday’s bargain-buying action follows the biggest monthly loss since March 2020, although the benchmark index eked out a fractional gain for the quarter. 

For the Week…
The S&P 500 fell 2.19%, the Dow Jones Industrial Average declined 1.36% and the tech-heavy Nasdaq Composite sank 3.19%. It was the worst weekly performance for the S&P 500 and Nasdaq since February 26. The small cap-focused Russell 2000 Index outperformed, slipping just 0.24%.

Sentiment Surprises Higher
The University of Michigan’s final reading of September consumer sentiment rose to 72.8 from 70.3 the month prior and up from a preliminary mid-September index level of 71.0. Despite the late September increase, sentiment remains near a pandemic low amid rising delta viral infections and heady inflation.

Broad Based Selling
10 of the 11 major sector groups ended negative last week, with only Energy (+5.80%) posting gains. Financials (-0.27%) and Materials
(-0.86%) fell the least while Technology (-3.34%) and Healthcare
(-3.51%) tumbled the most.

Treasury Yields Extend Gains
Easing prices on U.S. Treasurys offered little respite for sidelined cash as yields inched upward again last week. The benchmark 10-year Treasury yield rose just one point to end the week at 1.47%. The U.S. Dollar Index strengthened 0.76% to cap its fourth consecutive weekly gain. West Texas Intermediate crude oil futures rallied to $75.88/barrel on Friday, up 56% YTD and is on track to reach a 2014 high.

The Latest from @CeteraIM

Recovery Improves Third Week

Sector Breadth Narrows

Spooky Pre-Halloween Month

Economic Calendar

Monday, October 4
Factory Orders.

Tuesday, October 5
U.S. Trade Deficit, ISM & IHS Markit Services PMIs.

Wednesday, October 6
ADP Private Payrolls.

Thursday, October 7
Jobless Claims.

Friday, October 8
Nonfarm Payrolls, Unemployment Rates, Hourly Earnings, Wholesale Trade Sales.

Consumer spending on goods recovered much faster than spending on services in the immediate aftermath of last year’s shutdown. Over the last six months, however, spending on goods has weakened (although it increased in August) and spending on services remains in an upward trend (but is still below pre-pandemic levels). Positively, COVID-19 cases are declining from the early September Delta-variant peak, which should be positive for the services economy if the infection rate continues to fall.

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
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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 Barclays 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 Barclays 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 Barclays 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.