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Weekly Recap | December 6, 2021

Weekly Recap | December 6, 2021

December 07, 2021
Weekly Recap

November 29 - December 3, 2021 Recap

Volatility Returns

Stocks Weaken Second Week
All three major U.S. equity indices ended lower Friday, with the S&P 500 suffering its second consecutive week of losses. Downside catalysts were a weak November payrolls report and a broad big-tech selloff that stirred intense volatility not seen since the worst days of the pandemic last year. Uncertainties over the Omicron variant and comments from Fed Chairman Powell indicated a more hawkish Fed pushed the Cboe VIX Volatility Index to its highest level since January.

For the Week…
The S&P 500 fell 1.17%, the Dow Industrials lost 0.91% and the tech-heavy Nasdaq Composite slumped 2.60%.

Smallest Jobs Growth This Year
Labor market growth slowed in November with nonfarm payrolls expanding by just 210,000, well below expectations (530,000). Monthly jobs growth had averaged 470,000 for the three months prior. Positively, upward revisions the prior two months added 82,000 jobs, the unemployment rate fell to 4.2% from 4.6% and the labor force participation rose from 61.7% to 61.8%, a new pandemic high.

Defensive Stocks Outperform
Nine of the 11 major S&P 500 sector groups posted negative returns last week, led to the downside by Communication Services (-2.75%), Consumer Discretionary (-2.29%) and Financials (-1.90%). Defensive-oriented sectors outperformed, with Utilities (+1.03%) and Real Estate (+0.09%) posting gains while Consumer Staples (-0.31%) fell the least.

Treasury Prices Climb
Treasurys rallied on Friday amid outsized safe haven-buying, sending the yield on 10-year Treasury notes to below 1.4%. The benchmark Treasury yield fell 13.7 basis points (-0.137%) to 1.340%.  The U.S. Dollar Index strengthened for a sixth straight week, albeit just a 0.03% increase. The dollar index is up 2.64% since October 22. U.S. WTI crude oil futures fell $1.89 (2.8%) last week to end Friday at $66.26/barrel.

The Latest from @CeteraIM

Recovery Still Intact

Weak Jobs Report

Sacrificing GDP Growth to Fight Inflation

Economic Calendar

Monday, December 6
No Major Releases.

Tuesday, December 7
Labor Productivity/Costs, U.S. Trade Deficit.

Wednesday, December 8
Mortgage Activity, JOLTS Job Openings.

Thursday, December 9
Jobless Claims, Wholesale Trade Sales/Inventories.

Friday, December 10
Consumer Prices, Hourly Earnings, Consumer Sentiment.

The valuation gap between large cap growth and large cap value is the widest since 2000 based on the forward price-to-sales ratio (P/S). The Russell 1000 Growth Index has traded at an average P/S premium of 1.6 versus the Russell 1000 Value Index since 2000 but now trades at a premium of 2.7.

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), Cetera Financial Specialists LLC, and First Allied Securities, Inc. All firms are members FINRA / SIPC. Located at 200 N. Pacific Coast Highway, Suite 1200 El Segundo, CA 90245-5670

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.

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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 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.

The Chicago Board Options Exchange (CBOE) Volatility Index is a measure of the stock market's expectation of volatility implied by S&P 500 index options.