Stocks Break Losing Streak
Equities Bounce Back
U.S. stocks reversed course and broke their three-week losing streak. Investors became more optimistic that inflation likely peaked ahead of this week’s inflation reports. The first one will be released on Tuesday and the second on Wednesday. Investors may also have rallied around possible oversold conditions.
For the Week…
The S&P 500 rose 3.68%, the Dow Jones Industrial Average gained 2.72% and the tech-heavy Nasdaq Composite was up 4.15%. Stocks broke three consecutive weeks of declines and the NASDAQ roughly gained back all of its loses from the prior week.
Fewer Jobless Claims
Initial jobless claims fell to a 14-week low last week, declining to 222,000 from 228,000 the week prior. The resilient labor market is providing the Fed more ammunition to combat inflation. The current odds strongly favor another 0.75% rate hike next week.
All 11 major sector groups posted gains last week, with Consumer Discretionary (+5.63%), Materials (+5.03%) and Financials (+4.42%) up the most. Communication Services (+2.86%) gained the least, followed by Consumer Staples (+1.94%) and Energy (+0.73%). Year-to-date, Energy (+49.22%) and Utilities (+9.81%) are still this year’s top and only gainers.
Treasury Yields Rise More
Treasury yields rose yet another week with the 10-year benchmark Treasury yield jumping over 0.12% to end Friday at 3.32%. The yield on two-year Treasury notes finished at 3.56% up 0.16%. The U.S. Dollar Index fell 0.48% last week, its first decline since August 12.
This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on Twitter.