November 15-19, 2021 Recap
Equities Trade Near Record Highs
Large cap stocks climbed fractionally to erase a prior week loss. Investors welcomed solid earnings from major retailers and a strong 1.7% October retail sales report. The third quarter earnings season is nearly complete. Of the 480 companies in the S&P 500 reporting results, 82% have topped analysts’ forecasts. U.S. markets will be closed Thursday for Thanksgiving Day and will close early at 1 p.m. ET on Friday.
For the Week…
The S&P 500 edged 0.36% higher, the Dow Industrials fell 1.38% and the tech-heavy Nasdaq Composite advanced 1.27%. The small cap-focused Russell 2000 declined a second week, slumping over 2.8%, after falling 1% the prior week.
Manufacturing output increased to a new pandemic high last month, led by a 17.8% surge in motor vehicle production. Auto manufacturing has been volatile this year because of supply constraints but last month’s increase is an encouraging sign for the auto sector.
Consumer Discretionary Performs Best
The S&P 500 ended higher on the week with just four of the 11 major sector groups posting gains. Consumer Discretionary (+3.83%), Technology (+2.41%) and Utilities (+0.99%) outperformed, while Energy (-4.90%), Financials (-2.81%) and Materials (-1.98%) declined the most.
Treasury Prices Climb
Treasury yields, which move inversely to prices, declined last week. Concerns around rising COVID-19 cases in Europe pared global growth prospects. The yield on benchmark 10-year Treasury notes eased to 1.536% from 1.582% the week prior. The U.S. Dollar Index strengthened for a fourth consecutive week, up 0.95% and is up 2.55% since October 22. U.S. WTI crude oil futures trimmed gains again last week, ending Friday at $75.94/barrel.
Monday, November 22
Chicago Fed National Activity, Existing Home Sales.
Tuesday, November 23
IHS Markit Flash U.S. Manufacturing & Services PMIs, Richmond Fed Manufacturing Activity.
Wednesday, November 24
Jobless Claims, Goods-only Trade Balance, 3Q GDP, Personal Incomes & Consumption, PCE Prices, Durable Goods Orders, New Home Sales, Consumer Sentiment, FOMC Minutes.
Thursday, November 25
All Markets Closed, Thanksgiving Day.
Friday, November 26
No Major Releases, Early Market Close (1 pm ET).
The Leading Economic Index (LEI) rose 0.9% in October, signaling a positive outlook for the economy. The LEI is nearly 6% above the pre-pandemic peak. The pace of recovery from last year’s recession really stands out when compared to the period following the 2008-09 financial crisis.
This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on Twitter.
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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.