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Weekly Recap | September 27, 2021

Weekly Recap | September 27, 2021

September 29, 2021
Weekly Recap

September 20 - 24, 2021 Recap

Equities Gain Despite Chinese Angst

Stocks Post Winning Week
Despite the turmoil in global markets last week, all three major U.S. equity indexes ended positive on the week, albeit fractionally. Investors largely shook off volatility concerns stemming from the Fed’s policy announcement to begin a stimulus pullback “soon” (likely to be announced in November), contagion risks associated with China’s distressed Evergrande Group and Beijing’s smackdown on cryptocurrencies. On a closing basis from Friday, the S&P 500 still has not experienced a 5%+ pullback from its most recent September 2 peak and thus the current bull market remains the ninth longest rally since World War II.

For the Week…
After back-to-back weekly losses, the S&P 500 rebounded 0.52%, the Dow Jones Industrial Average rose 0.62% to break a three-week losing streak, and the tech-heavy Nasdaq Composite added just 0.03%. The small cap-focused Russell 2000 Index climbed a second straight week, up 0.51%.

Fed Stimulus & Rate Outlook
The central bank policy statement from the Fed’s September 21-22 FOMC meeting signaled policymakers will begin tapering its bond-buying program “soon” amid progress toward inflation and employment growth. “Soon” is widely viewed as a November announcement with tapering likely not starting until December and lasting through mid-2022. Interest rate hikes are not expected until the end of 2022.

Energy Gains Most
Six of the 11 major sector groups posted gains last week with Energy (+4.70%), Financials (+2.21%) and Technology (+0.97%) leading the advance. Materials (+0.12%) rose the least while Real Estate (-1.48%) and Utilities (-1.17%) fell the most.

Treasury Yields Extend Gains
Treasury yields accelerated gains into another week, as investors become more comfortable with the eventual start to Fed tapering. The benchmark 10-year Treasury yield climbed from 1.37% a week ago to close Friday at 1.46%. The U.S. Dollar Index rose 0.14% to cap a third week of gains.

The Latest from @CeteraIM

Recovery Improves Second Week

Jobless Claims Rise

November Taper Start Likely

Economic Calendar

Monday, Sept 27
Durable & Core Capital Goods Orders.

Tuesday, Sept 28
Advance Goods-Only Trade Balance, S&P Case-Shiller Home Prices, Consumer Confidence.

Wednesday, Sept 29
Pending Home Sales.

Thursday, Sept 30
Jobless Claims, Chicago PMI, Final 2Q Real GDP.

Friday, Oct 1
Personal Incomes & Spending, ISM & Markit Manufacturing PMIs, Construction Spending, Consumer Sentiment.

The year-over-year change for producer costs (PPI) were 3% above consumer cost (CPI) increases in August. Consumer prices have risen quickly this year, but not as fast as producer costs, indicating companies haven’t passed all of their higher costs to consumers. That could change if producer input costs do not ease in the coming months.

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.