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Weekly Recap | January 3, 2022

Weekly Recap | January 3, 2022

January 04, 2022
Weekly Recap

December 27-31, 2021 Recap

Stocks Break Weekly See-Saw Trend

S&P 500 Sets 70th Record High
U.S. equity averages returned to gains again last week as investors cheered indications that omicron infections may be peaking in early-hit nations. Equity appetites increased for its first back-to-back weekly gains in December after South Africa lifted its overnight curfew restrictions and went to the lowest of its five-stage COVID-19 alert levels. Meanwhile, the U.S. cut its isolation guidelines for those testing COVID-19 positive to five days from 10. On Wednesday of the final week of the year, the S&P 500 notched its 70th all-time closing high for the year, albeit ending Friday around half of 1% below the record.

For the Week…
The S&P 500 rose 0.87%, extending its 2.30% prior week gain, the Dow Industrials pushed 1.08% higher while the tech-heavy Nasdaq Composite slipped 0.5% after previously gaining 3.2% during the holiday-shortened week. The small cap-focused Russell 2000 also posted a second weekly gain, up 0.21%.

Jobless Claims Average Hits Fresh Low
Initial claims for unemployment benefits fell to 198,000 last week, a decline of 8,000 from the week prior. The four-week claims average declined to 199,250, which is the lowest since October 1969. For perspective, the four-week average was over 800,000 at the start of the year.

Real Estate Performs Best in Final Week
All but one of the 11 major sectors ended positive last week, led by Real Estate (+3.80%), Utilities (+2.66%) and Materials (+2.65%). Technology (+0.47%) and Consumer Discretionary (+0.42%) rose the least, while Communication Services (-0.79%) retreated on jitters about carriers defying an FAA government request to delay launching 5G service on security issues.

Treasury Prices Ease
Treasury prices declined last week amid a rotation back into equities, sending yields higher. The yield on benchmark 10-year Treasury notes climbed nine basis points (+0.09%) to end Thursday at 1.494%. The U.S. Dollar Index weakened by 0.57% and U.S. WTI crude oil gained over $3 to end the holiday-shortened week at $73.79/barrel.

The Latest from @CeteraIM

Recovery Pace Still in Low Gear

Housing is a Bright Spot

Long Term Inflation Outlook Eases

Economic Calendar

Monday, January 3
IHS Markit Manufacturing PMI, Construction Spending.

Tuesday, January 4
ISM Manufacturing PMI, JOLTS Job Openings.

Wednesday, January 5
Mortgage Activity, ADP Private Payrolls, IHS Markit Services PMI, FOMC Meeting Minutes.

Thursday, January 6
Jobless Claims, U.S. Trade Deficit, ISM Services PMI, Durable Goods Orders, Capital Goods Orders.

Friday, January 7
Nonfarm Payrolls, Unemployment Rate, Average Hourly Earnings.

The Russell 2000 was 38% above its 200-day moving average in February. The index of small cap stocks has moved sideways over the last 10 months and is now priced close to the 200-day moving average. Small caps still have attractive fundamentals. Valuations are reasonable and earnings growth expectation for 2022 are strong.

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 655 W Broadway, 11th Floor, San Diego, CA 92101

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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.