Weekly Recap | June 7, 2021

June 08, 2021

Weekly Recap

May 31-June 4, 2021 Recap

Stocks Rise, Nearing Record Highs

Equities Rebound Second Week
The S&P 500 rose to within a whisper of its May 7 all-time high as Friday’s jobs data boosted recovery confidence while a pickup in wages (+0.5% M/M, +2% Y/Y) added to inflation concerns. Stocks began the holiday-shortened week fluctuating between small gains and losses amid worries over rising prices before bullish momentum returned to close out the week. The U.S. added slightly fewer jobs than economists projected while the unemployment rate fell more than expected. Altogether, the mixed data presented Wall Street with a Goldilocks view that Americans are returning to work but not at a pace that would prompt the Federal Reserve to pare back additional economic support.

For the Week…
The S&P 500 gained 0.64% last week, the Dow Industrials rose 0.66% and the tech-heavy Nasdaq Composite gained for a third straight week, rising 0.49%. In style performance, Small cap Value continues to outperform most, rising 1.8% last week versus its Growth (-0.38%) counterpart.

Jobless Claims at Lowest Since Mid-March 2020
Weekly state jobless claims fell below the 400,000 mark for the first time during the pandemic, declining by 20,000 to 385,000. Economists projected 387,000. Claims fell the most in Texas, Florida and Oregon. Continuing claims in all programs declined by 366,178 to 15,435,982, which is down from 30,770,615 in the same week a year ago.

Energy Leads Again
Nine of the 11 major sectors posted gains last week, with Energy (+6.70%), Real Estate (+3.05%) and Financials (+1.27%) rising the most. Industrials (+0.23%) gained the least, while Healthcare (-1.15%) and Consumer Discretionary (-0.95%) declined. Energy (+48.6%) and Financials (+31.2%) are up the most this year, followed by Real Estate (+23.1%).

Treasury Yields Slip
Treasury yields back-peddled again last week, with the 10-year Treasury yield falling around three basis points to end Friday at 1.55%. The U.S. Dollar Index strengthened a second week, rising 0.12%. U.S. WTI Crude oil futures rose nearly 5% last week, helping push the Bloomberg Commodities Index to end the week at a six-year high.

The Latest from @CeteraIM

Unemployment Jobless Rate Drops

Services Data Sets New High

Rotation Momentum Builds

Economic Calendar

Monday, June 7
No Major Releases.

Tuesday, June 8
Small Business Optimism, Trade Deficit, JOLTS Job Openings.

Wednesday, June 9
Mortgage Activity, Wholesale Trade & Inventories.

Thursday, June 10
Jobless Claims, Consumer Prices (CPI), Monthly Budget.

Friday, June 11
Consumer Sentiment.

The U.S. economy added 559,000 new jobs in May (vs. expectations of 671,000 new jobs) and the unemployment rate fell to 5.8% from 6.1% in April. While 14.7 million jobs have been recovered since the labor market bottomed, total employment is still 7.6 million below the pre-pandemic peak. Labor market growth was slower than expected the last few months, reinforcing the Fed’s dovish stance on monetary policy.

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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. The market indices discussed are not actively managed. Investors cannot directly invest in unmanaged indices. Please consult your financial advisor for more information.}

^{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 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.}