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Weekly Recap | December 27, 2021

Weekly Recap | December 27, 2021

December 28, 2021
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Weekly Recap

December 20-24, 2021 Recap

Stocks See-Saw Positive

S&P 500 Sets New Record High
U.S. equity averages returned to gains last week as investors digested mixed economic data and the latest scientific data on the spread and severity of the viral omicron variant. The S&P 500 has alternated between weekly gains and losses for four straight weeks so far in December. Equity appetites increased most recently on data showing omicron inherently has lower risks of hospitalization than other variants. On the Christmas-holiday shortened week, the S&P 500 notched a three-day rally and finished Thursday at its 68th all-time high of the year.

For the Week…
The S&P 500 advanced 2.30%, more than fully erasing its 1.9% prior week loss, and the Dow Industrials rebounded 1.65%. The tech-heavy Nasdaq Composite outperformed, gaining 3.2% after a near 3% loss the week prior. The small cap-focused Russell 2000 gained 3.1%.

Holiday Sales Surprise Higher
Despite inflationary pressures together with omicron and supply-chain jitters, U.S. 2021 holiday sales rose 8.5%, the fastest pace in 17 years, according to Mastercard’s SpendingPulse tracking. Comparatively, holiday sales are up 10.7% this year versus the pre-pandemic 2019 holiday season.

Consumer Discretionary Rebounds Most
All 11 major sectors ended positive last week, led by Consumer Discretionary (+3.82%), Technology (+3.29%) and Communication Services (+2.55%). Real Estate (+0.56%) and Utilities (+0.31%) gained the least. Going into the final week of the year, Energy (+52.99%) and Real Estate (+40.84%) have gained the most this year.

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 Slows

Defensives Lead in December

Long Term Inflation Outlook Eases

Economic Calendar

Monday, December 27
Dallas Fed Manufacturing Activity.

Tuesday, December 28
Case-Shiller Home Prices, Richmond Fed Manufacturing.

Wednesday, December 29
Goods-only Trade Balance, Wholesale & Retail Inventories, Pending Home Sales.

Thursday, December 30
Jobless Claims, MNI Chicago PMI.

Friday, December 31
New Year’s Eve, No Major Releases.

The inventory of existing homes for sale fell to only 2.1 months of supply in November, approaching the record low of 1.9 months of supply set in January. Overall, existing home sales were strong in November, rising at the fastest pace in 10 months. The inventory of existing homes for sale might remain low through next year. High rental price growth and favorable demographics are lifting demand for home ownership. Moreover, many current homeowners may remain reluctant to sell their house because they are locked into historically low mortgage rates, and if they want to sell, they need to enter a market with limited inventory and high prices.

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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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.

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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 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.