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Weekly Recap | August 2, 2021

Weekly Recap | August 2, 2021

August 05, 2021
Weekly Recap

July 26 - 30, 2021 Recap

Paring Record Highs

Stocks Nudge Lower
All three major U.S. equity indices got haircuts last week, with the S&P 500 fluttering near record highs on Friday but reversed gains to close out the week fractionally lower. Investors grew cautious as Delta variant caseloads and hospitalizations intensified (including among some fully vaccinated), threatening to delay progress of the U.S. recovery. China’s tightening grip on its technology and interest businesses also weighed on investor sentiment, along with a key U.S. online retailer’s revenue miss. 

For the Week…
The S&P 500 fell 0.35% in the last week of July, the Dow Industrials echoed with a 0.36% decline while the tech-heavy Nasdaq Composite fell 1.10%. 

Goods-Trade Balance Widens
The advance goods-only U.S. trade deficit unfortunately widened by 3.5% to $91.2B in June ($88B expected), the second-largest goods trade gap on record. The jump was primarily due to a spike in more costly petroleum imports. Auto imports fell a third month, down 2.5% to $28.5B as the industry remains hampered by the global semiconductor shortage. Imports rose 1.5% to a record high $236.7B, while exports rose 0.3% to $145.5B. 

Top Weekly Gainer: Materials
Surprisingly, seven of the 11 major S&P 500 sector groups posted gains last week, led by Materials (+2.80%), Energy (+1.68%) and Financials (0.79%). Consumer Staples (+0.24%) rose the least while Consumer Discretionary (-2.57%) and Communication Services (-0.96%) declined. 

Treasury Yields Weaken Again
Benchmark 10-year Treasury yields again extended its downward spiral into a sixth week, falling another three basis points to finish Friday at 1.23%. The yield on longer-term 30-year Treasurys weakened to 1.89%. For the week, the U.S. Dollar Index has weakened by 0.79% last week and U.S. WTI crude oil futures gained 0.71% to end at $73.95/barrel.

The Latest from @CeteraIM

Weekly Recovery Pace Slows

Growth Overpowers Value

The Fed is in a Pickle

Economic Calendar

Monday, August 2
IHS Markit/ISM Manufacturing PMIs, Construction Spending.

Tuesday, August 3
June Final Durable Goods Orders/Capital Goods Orders.

Wednesday, August 4
Mortgage Activity, ADP Private Sector Jobs, IHS Markit/ISM Services PMIs.

Thursday, August 5
Jobless Claims, U.S. Trade Deficit.

Friday, August 6
U.S. Nonfarm Payrolls, Unemployment Rate, Hourly Earnings, Wholesale Trade.

U.S. real GDP growth was 6.5% in the second quarter as economic growth surpassed 6% in each of the first two quarters of the year. While the economy grew at the fourth fastest rate since 2000, overall growth missed consensus expectations (+8.5%). Personal consumption was the biggest contributor to growth last quarter, but inventories subtracted 1.1% from GDP growth. Positively, U.S. real GDP is back above the pre-pandemic peak.

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.