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Weekly Recap | May 13, 2024

Weekly Recap | May 13, 2024

May 15, 2024
Weekly Recap

May 6-May 10, 2024 Recap

Stocks Extend May Gains

Markets Drift Higher
Equity markets extended May gains last week, rebounding from April’s correction. The S&P 500 finished positive for the third straight week, pushing the month-to-date increase to 3.77%. The Dow extended its streak of gains to eight on Friday. Last week was fairly limited for key economic releases, however there were a few notable misses including jobless claims rising to an 8-month high and consumer sentiment falling more than expected. Despite these misses, investors remained upbeat because earnings season has been stronger than expected.

For the Week…
Among the major U.S. indices, the Dow Jones Industrial Average rose 2.20%, extending its streak of weekly gains to three. The S&P 500 increased 1.89%, while the Nasdaq Composite gained 1.17%. The broad-based gains in U.S. equities extended to small caps, with the Russell 2000 up 1.21% last week.

Jobless Claims Rise
Initial jobless claims increased to an 8-month high of 231,000 last week, rising by 22,000 from the week prior. Economists only expected a moderate increase to 213,000. Continued claims expanded by 17,000 to 1.79 million. Jobless claims data can be volatile from week to week. This may be a blip, or a new trend, but the 4-week average of 215,000 initial claims is still low by historical standards.

Weekly Sector Insights
All 11 major sectors posted gains last week, led by Utilities (+4.13%), Financials (+3.12%), Materials (+2.60%) and Industrials (+2.35%). Consumer Discretionary (+0.18%), Energy (+1.42%) and Information Technology (+1.46%) gained the least. The 2024 year-to-date sector leaderboard is headlined by Communication Services (+19.28%), Utilities (+13.51%), and Energy (+13.13%).

Treasury Yields Little Changed
The bond market was relatively quiet last week, as investors await this week’s release of April’s CPI and PPI reports to assess the path of inflation. The 10-yield Treasury note increased by only one basis point last week, rising to 4.50% at Friday’s close. Gold futures rose 3.66% last week, while WTI Crude Oil edged lower by 0.49%. Crude oil prices are down 4.89% this month.

The Latest from @CeteraIM

Consumer Credit Growth Slows

All Quiet on the Home Sales Front

International Equities Trying to Make a Comeback

Economic Calendar

Monday, May 13
No Major Releases.

Tuesday, May 14
NFIB Small Business Index, Producer Price Index (PPI).

Wednesday, May 15
Mortgage Activity, Consumer Price Index (CPI), Retail Sales, Empire State Index, NAHB Housing Market Index.

Thursday, May 16
Jobless Claims, Housing Construction Activity, Industrial Production.

Friday, May 17
Leading Indicators.

Used car prices continue to decline, with the Manheim Used Vehicle Index dropping 2.3% in April. Wholesale prices have fallen 23% since the peak in January 2022. Despite this decline, used car prices are 27% above the February 2020 pre-pandemic level.

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
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.

About Cetera Financial Group
“Cetera Financial Group” refers to the network of independent retail firms encompassing, among others, Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), and Cetera Financial Specialists LLC. All firms are members FINRA / SIPC. Located at 655 W. Broadway, 11th Floor, San Diego, CA  92101.

Disclosures
Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

The material contained in this document was authored by and is the property of Cetera Investment Management LLC. Cetera Investment Management provides investment management and advisory services to a number of programs sponsored by affiliated and non-affiliated registered investment advisers. Your registered representative or investment adviser representative is not registered with Cetera Investment Management and did not take part in the creation of this material. He or she may not be able to offer Cetera Investment Management portfolio management services.

Nothing in this presentation should be construed as offering or disseminating specific investment, tax, or legal advice to any individual without the benefit of direct and specific consultation with an investment adviser representative authorized to offer Cetera Investment Management services. Information contained herein shall not constitute an offer or a solicitation of any services. Past performance is not a guarantee of future results.

For more information about Cetera Investment Management, please reference the Cetera Investment Management LLC Form ADV disclosure brochure and the disclosure brochure for the registered investment adviser your adviser is registered with. Please consult with your adviser for his or her specific firm registrations and programs available.

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.