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Weekly Recap | July 10, 2023

Weekly Recap | July 10, 2023

July 10, 2023
Weekly Recap

July 3-7, 2023 Recap

Weak Second Half Start for Stocks and Bonds

Rate Concerns Take Center Stage
All three major indices logged weekly declines in the first week of July following strong gains during the first half of the year. Wall Street selling was largely induced by growing fears around a higher-for-longer Fed rate policy although worries eased after June payrolls came in weaker than expected. The S&P 500 fell just over 1.1% for the Fourth of July holiday-shortened week, posting losses in three out of the four trading days.

For the Week…
The S&P 500 fell 1.11%, retracing about half of its 2.36% prior week gain. The Dow Jones Industrial Average fell 1.96% and the tech-heavy Nasdaq Composite declined 0.91%. Mid caps (-0.61%) fell the least and small caps (-1.26%) fell the most. Selling was most pronounced amongst small cap growth stocks (-1.81%).

Trade Gap Narrows
The U.S. trade deficit contracted in May as the value of imported goods declined to the lowest level since October 2021. The monthly deficit shrank by 7.3% (-$5.5B) to -$68.98B. Imports declined 2.3%, led by decreases in consumer goods and industrial supplies while exports fell 0.8%, led by a drop in shipments of food and ag-based feeds such as soybeans.

Weekly Sector Insights
Real Estate (+0.22%) was the only winning sector last week. Communication Services (-0.13%) and Utilities (-0.13%) fell the least while Healthcare (-2.85%), Materials (-2.00%), and Technology
(-1.44%) fell the most. Technology (+40.72%), Communication Services (+36.06%), and Consumer Discretionary (+32.63%) are still this year’s top performers.

Treasury Yields Advance
The yield on benchmark 10-year Treasury notes ended Friday at 4.047%, up nearly 0.24% from the week prior. Although the central bank voted to keep rates steady for the first time after ten consecutive hikes, the June Fed policy meeting minutes released last week showed that some policymakers favored raising interest rates by a quarter percentage point. The odds for a July rate hike advanced sharply during the week.

The Latest from @CeteraIM

Wage Growth Rising Again

Factory Construction Boom

ISM Services Activity Climbs  

Economic Calendar

Monday, July 10
Wholesale Trade Sales/Inventories, Consumer Credit.

Tuesday, July 11
Small Business Optimism.

Wednesday, July 12
Mortgage Activity, Consumer Price Index, Fed Beige Book.

Thursday, July 13
Jobless Claims, Producer Price Index, Federal Budget Deficit.

Friday, July 14
Import/Export Prices, Consumer Sentiment.

U.S. nonfarm payrolls grew by 209,000 jobs in June, the lowest level of monthly job growth since December 2020. In the first six months of 2023, the labor market expanded by an average of 278,000 jobs per month. For context, the average pace of job growth in the last two calendar years of the prior expansion (2018-19) was 177,000 jobs per month. The labor market is still healthy, but the pace of hiring is slowing.

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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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.


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.