Market View Weekly

 

 

 

 

 

 

OBSERVATIONS

 

  • U.S. equities were positive across the board, although investors seem to be favoring value, defensives, and current cash-flow generators as the Dow outpaced the S&P 500 by 0.24% and the Nasdaq by more than 1%.
  • Mid-cap stocks rebounded nicely from the previous week’s poor performance, leading all style boxes domestically.
  • Developed international markets easily outperformed Emerging Markets – the only negative equity asset class, as well as beat out all domestic indices in returning 2.15% last week.
  • Bonds were positive domestically, globally, and in the credit space; the Bloomberg Barclays Global Aggregate Bond index improved +0.89%.

BY THE NUMBERS

 

Farm Bureau Survey – Thanksgiving Dinner Cost up 20%: Spending time with family and friends at Thanksgiving remains important for many Americans and this year the cost of the meal is also top of mind. Farm Bureau’s 37th annual survey provides a snapshot of the average cost of this year’s classic Thanksgiving feast for 10, which is $64.05 or less than $6.50 per person. This is a $10.74 or 20% increase from last year’s average of $53.31. The centerpiece on most Thanksgiving tables – the turkey – costs more than last year, at $28.96 for a 16-pound bird. That’s $1.81 per pound, up 21% from last year, due to several factors beyond general inflation. Farm Bureau “volunteer shoppers” checked prices Oct. 18-31 – before most grocery store chains began featuring whole frozen turkeys at sharply lower prices. 3

 

U.S. and England Battle to 0-0 Draw in World Cup Showdown: AL KHOR, Qatar—American hopes stayed alive at the Qatar World Cup on Friday following the most un-American of results: a scoreless tie against England. On a night that saw the U.S. go for broke in search of a historic upset, the team left Al Bayt Stadium here still in control of its own destiny, but also carrying plenty of regrets for the chances it couldn’t put away. The Americans had the clearest scoring opportunities of the match yet couldn’t find a way to turn its control into goals against a suddenly toothless England. Iran’s earlier 2-0 victory over Wales means that when the U.S. squares off against Iran on Tuesday, both will have everything to play for. Whichever team comes out on top would all but guarantee its spot in the round of 16. A draw in this wide-open group would likely send Iran to the knockout round. “I hope we made a lot of people proud, but the job’s not even close to done,” U.S. playmaker Christian Pulisic said. 4

Economic Definitions

 

Durable Goods Orders: This concept tracks the value of new orders received during the reference period. Orders are typically based on a legal agreement between two parties in which the producer will deliver goods or services to the purchaser at a future date.

New Home Sales: This concept tracks sales of newly constructed homes during the reference period. The Implicit US index is computed by taking the number of houses sold in the US and dividing it by the seasonally adjusted number of houses sold in the US.

Federal Reserve (Fed): The Federal Reserve System is the central banking system of the United States of America.

CPI (headline and core): Consumer prices (CPI) are a measure of prices paid by consumers for a market basket of consumer goods and services. The yearly (or monthly) growth rates represent the inflation rate.

GDP QoQ: Gross domestic product (GDP) measures the final market value of all goods and services produced within a country. It is the most frequently used indicator of economic activity. The GDP by expenditure approach measures total final expenditures (at purchasers' prices), including exports less imports. This concept is adjusted for inflation.

PCE (headline and core): PCE deflators (or personal consumption expenditure deflators) track overall price changes for goods and services purchased by consumers. Deflators are calculated by dividing the appropriate nominal series by the corresponding real series and multiplying by 100.

Nonfarm Payrolls: This indicator measures the number of employees on business payrolls. It is also sometimes referred to as establishment survey employment to distinguish it from the household survey measure of employment.

University of Michigan Consumer Sentiment Index: Consumer confidence tracks sentiment among households or consumers. The results are based on surveys conducted among a random sample of households. Target Audience: representative sample of US households (excluding Alaska and Hawaii). Surveys of Consumers collects data on consumer attitudes and expectations summarized in the Consumer Sentiment, in order to determine the changes in consumers' willingness to buy and to predict their subsequent discretionary expenditures. This Index is comprised of measures of attitudes toward personal finances, general business conditions, and market conditions or prices. Components of the Index of Consumer Sentiment are included in the Leading Indicator Composite Index. Unit: Index (Q1 1966=100)

Beige Book: A summary of commentary on current economic conditions by Federal Reserve District. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources.

 

Index Definitions

 

S&P 500: The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

NASDAQ: The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.

Dow Jones Industrial Average: The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.

Russell Mid-Cap: Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index.

Russell 2000: The Russell 2000 Index is comprised of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the Russell 3000 total market capitalization. The real-time value is calculated with a base value of 135.00 as of December 31, 1986. The end-of-day value is calculated with a base value of 100.00 as of December 29, 1978.

MSCI EAFE: The MSCI EAFE Index is a free-float weighted equity index. The index was developed with a base value of 100 as of December 31, 1969. The MSCI EAFE region covers DM countries in Europe, Australasia, Israel, and the Far East.

MSCI EM: The MSCI EM (Emerging Markets) Index is a free-float weighted equity index that captures large and mid-cap representation across Emerging Markets (EM) countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

Bloomberg Barclays US Agg Bond: The Bloomberg Barclays US 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 securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency). 

Bloomberg Barclays High Yield Corp: The Bloomberg Barclays US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate 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. Bonds from issuers with an emerging markets country of risk, based on Barclays EM country definition, are excluded.

Bloomberg Barclays Global Agg: The Bloomberg Barclays Global Aggregate Index is a flagship measure of global investment grade debt from twenty-four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers.

Bloomberg Barclays Municipal Bond Index: The Bloomberg Barclays U.S. Municipal 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.

 

Disclosures

 

Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results.

 

The statements provided herein are based solely on the opinions of the Advisor Group Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Advisor Group or its affiliates. Certain information may be based on information received from sources the Advisor Group Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Advisor Group Research Team only as of the date of this document and are subject to change without notice. Advisor Group has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Advisor Group is not soliciting or recommending any action based on any information in this document.

 

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1 Data Obtained from Bloomberg as of 11/25/2022 

2 Surveys of Consumers (umich.edu) 4

Farm Bureau Survey Shows Thanksgiving Dinner Cost Up 20% (fb.org)

4 U.S. and England Battle to a 0-0 Draw in World Cup Showdown - WSJ

 

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