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Weekly Recap | June 10, 2024

Weekly Recap | June 10, 2024

June 10, 2024
Weekly Recap

June 3-June 7, 2024 Recap

Stocks Have a Winning Week

Rate Cut Expectations Slip Further
U.S. stocks had a winning week coupled with a mixed payrolls report on Friday that strengthened views the Fed could keep rates higher for longer. Nonfarm payrolls came in stronger than expected while the headline unemployment rate climbed to 4%. Megacap technology stocks led the way higher, yet valuation concentration concerns resurfaced. Gains for the week peaked on Wednesday, with the S&P 500 closing the mid-week session at its 25th all-time high of 2024.

For the Week…
The S&P 500 and Nasdaq Composite rose 1.36% and 2.40%, respectively, both posting their sixth gain of the past seven weeks. The Dow Jones Industrial Average rose a lesser 0.33%. The broader Russell 3000 rose 0.98% while the small cap focused Russell 2000 slumped 2.07%.

Mixed Payrolls Takeaways
U.S. jobs growth expanded by 272,000 in May, widely topping forecasts for 180,000. The increase also exceeded the 232,000 average monthly gain over the past 12 months. Separate data showed the unemployment rate increased to 4% for the first time since January 2022 while workers average hourly wages rose 0.4%, up 4.1% from a year ago.

Weekly Sector Insights
Six of the 11 major sector groups posted losses last week, led by Utilities (-3.81%), Energy (-3.41%) and Materials (-1.87%). Real Estate (-0.12%) fell the least while Technology (+3.83%), Healthcare (+1.96%) and Communication Services (+1.73%) gained the most. The 2024 year-to-date leaderboard continues to be led by Communication Services (+2.97%), Technology (+21.81%) and Utilities (+11.41%). The Real Estate sector again remains the only negative performer this year, down 4.49%.

Treasury Yields Dip
The yield on 10-year Treasury notes retreated nearly 0.15% on Friday, ending at 4.431%, but were down just 0.06% for the week. The U.S. Dollar Index rose 0.2% while gold futures fell 0.9% and U.S. WTI crude oil fell a third straight week, down 1.96%, ending Friday at $75.53/barrel.

The Latest from @CeteraIM

Rate Cut Views

Services PMI Activity Rebounds Out of Contraction

Productivity Growth Vs. Labor Costs

Economic Calendar

Monday, June 10
No Major Releases.

Tuesday, June 11
Small Business Optimism. FOMC Meeting Starts.

Wednesday, June 12
Mortgage Activity, Consumer Price Index (CPI), FOMC Rate & Policy Decisions, FOMC Press Conference, U.S. Federal Budget.

Thursday, June 13
Jobless Claims, Producer Price Index (PPI).

Friday, June 14
Import/Export Prices, Consumer Sentiment.

The prime-age (25-54) labor force participation rate hit a 22-year high of 83.6% in May. With 11,000 baby boomers reaching 65 each day, the economy needs a combo of higher productivity and rising labor participation to counter our aging population trends.

This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on X.

About Cetera® Investment Management
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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 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 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 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.