Weekly Recap | September 9, 2024

Weekly Recap

September 2-6, 2024  Worst Week for Nasdaq Since Early 2022 Technology Retreats 7% U.S. stocks ended sharply lower after last week’s labor market reports showed clear evidence of softening job creation, sparking concerns over the health of the economy. While Friday’s August nonfarm payrolls climbed from July, the report revealed a downward revision of 86,000 jobs for the prior two months. The revisions were preceded by the BLS’ earlier annual revisions which showed 818,000 fewer jobs were created from April 2023 through March 2024. The Federal Reserve remains data dependent ahead of its September 17-18 FOMC policy and rate cut decisions. For the Week… The S&P 500 fell 4.22% its worst weekly performance since March 2023, while the tech-heavy Nasdaq Composite sank 5.76%, its largest weekly loss since January 2022, putting the tech-heavy index more than 10% below its 2024 record high. The Dow Jones Industrial Average fell 2.90%. Job Openings Decline The number of job openings fell to 7.673 million in July from 7.910 million in June (8.090 million expected) and was down by 1.1 million over the year. In addition, June job openings were revised downwardly by 274,000 to 7.910 million from the initial 8.184 million previously reported. Weekly Sector Insights Nine of the 11 sector groups ended negative last week, with only Consumer Staples (+0.64%) and Real Estate (+0.19%) posting gains. Technology (-7.05%), Energy (-5.60%) and Communication Services (−5.04%) fell the most while Healthcare (-2.13%) and Utilities (-0.50%) fell the least. While all 11 sectors are still displaying positive year-to-date performance, the steep selloff in Technology knocked its 2024 leadership position into fourth place (+18.17%). Utilities (+21.93%), Financials (+18.72%) and Consumer Staples (+18.43%) are now the top gainers this year. Treasury Yields Drop Treasury securities rallied in price, sending yields falling to their lowest levels since early-to-mid 2023. The yield on 10-year Treasury notes ended Friday at 3.716%, down 0.20% for the week. Gold futures slipped just 0.1% while copper prices tumbled 3.3%. U.S. crude oil slumped 8%, its largest weekly selloff since March 2023, ending at $67.67/barrel, its lowest level since June 2023.

The Latest from @CeteraIM

Relief at the Gas Pump ISM PMIs Nudge Higher Job Openings Reach 42-Month Low

Economic Calendar Monday, September 9 Wholesale Trade Sales & Inventories, Consumer Credit. Tuesday, September 10 Small Business Optimism, OPEC Monthly Report. Wednesday, September 11 Mortgage Activity, Consumer Price Index (CPI). Thursday, September 12 Jobless Claims, Producer Price Index (PPI), Federal Budget Balance. Friday, September 13 Import/Export Prices, Consumer Sentiment.

Nonfarm payrolls expanded by 142,000 jobs last month but missed expectations of +160,000. The prior two months were revised lower by 86,000, while the unemployment rate edged lower to 4.2%. Over the last three months, nonfarm payrolls increased by an average of 116,000 per month, the lowest since June 2020. The labor market is still growing, but the pace is weakening.

This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on X.

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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.