Cetera Investment Management

With midterms just days away, it's a good reminder that long-term market returns aren't driven by elections. Since 1945, average S&P 500 2-year congressional cycle returns have been double-digit whether government is divided or unified under one party.

Market breadth entered October at frightening levels, with just 21% of S&P 500 stocks above their 50-day M.A., before rising from the grave to 65% ahead of Halloween. Count Stockula may lurk in the shadows, but the horror has faded for most stocks.

Market breadth entered October at frightening levels, with just 21% of S&P 500 stocks above their 50-day M.A., before rising from the grave to 65% ahead of Halloween. Count Stockula may lurk in the shadows, but the horror has faded for most stocks.

Market breadth entered October at frightening levels, with just 21% of S&P 500 stocks above their 50-day M.A., before rising from the grave to 65% ahead of Halloween. Count Stockula may lurk in the shadows, but the horror has faded for most stocks.

Hristo Stefanov, Director of Research at Cetera Investment Management, was featured in Citywire, sharing insights on evaluating U.S. equity managers, maintaining investment discipline and why process stability remains critical in manager selection. Read the article here: citywire.com/pro-buyer/speci…

Core PCE inflation (Fed’s preferred gauge) rose 0.32% in September, lifting the annual rate to 3.1%. The annualized pace over the past 3 and 6 months is 2.9%. Core inflation remains stuck about 1 percentage point above the Fed’s 2% target.

US real GDP growth accelerated to 3.4% in Q3, topping expectations of 3.2% and marking the strongest pace in a year. Robust consumer spending, private fixed investment, and government spending were the key drivers last quarter.

Bond yields typically climb during Fed hiking cycles. The 10-year treasury yield rose in each of the last 6 hiking cycles, with a median increase of 53 bps. However, yields tend to peak before the final hike as investors anticipate the end of the cycle.

Mortgage purchase applications increased 3.8% last week after a dip in mortgage rates, but homebuyer demand remains weak. The 4-week average is 60% below its 2021 pandemic peak and near its lowest levels since 1995.

Home prices are rising steadily despite mortgage rates climbing this year. The Case-Shiller US national home price index rose 0.3% in August, while the annual pace edged higher to 2.1%. A stable labor market continues to support housing prices.

Emerging market stocks are trading at their biggest discount to the S&P 500 in at least 20 years. The current P/E ratio of the MSCI EM Index is less than half of the S&P 500. Global diversification can offer value when valuations diverge.

Q3 earnings season is off to a hot start. Roughly 30% of S&P 500 firms have reported, with blended EPS growth of 29.5% and a beat rate of 82.8%. Strong earnings momentum could continue through year-end, with @FactSet projecting Q4 earnings growth of 28.8%.

The S&P 500 is up 11.3% YTD, but earnings estimates have risen even faster. The forward P/E ratio has dropped from 22.2x at the start of the year to 18.7x, below its 10-year average of 19.5x. Large cap valuations are the lowest since April 2025.

Who you gonna call? This week, CIO @GeneGoldman is joined by two very special guests as he suits up for Halloween with his baby twins in a Ghostbusters-inspired edition of #TheWeekAhead. Beyond the costumes, Gene breaks down the biggest event on investors’ radar: the upcoming Fed meeting. Will policymakers hold rates steady, signal a December hike, or surprise markets? Tune in as he explores inflation trends, Fed messaging, and the key signals investors should be watching this week. cetera.com/research-and-insi…

The AI trade isn't ending. It's expanding. Our latest commentary examines what's driving the recent selloff, where we see opportunities emerging, and why staying invested still matters. Read here: tinyurl.com/3eah5hve

The Leading Economic Index (LEI) was unchanged month over month in September, beating expectations for a 0.1% decline. Meanwhile, the Coincident Economic Index (CEI) rose 0.3% to a record high, signaling continued economic strength.

Initial jobless claims fell to 194K last week, below the 200K expected, while the 4-week average eased to 198K. Layoff figures remain low, signaling continued labor market resilience.

What could the Fed's next move mean for investors? @GeneGoldman recently sat down with @Ajshaps of @Ainvest_Wire to discuss the Federal Reserve's interest rate outlook and the potential implications for mortgage rates, Treasury yields, and the broader investment landscape. Watch the conversation to hear Gene's perspective on what investors may want to watch in the months ahead: youtu.be/xfRnRLsf1NM?si=N4Oo…

Mortgage applications fell 5.3% last week compared with previous week, while refinancing activity declined 2%. The avg contract rate eased to 7.41% from 7.50%, its first drop in two months. Elevated borrowing costs continued to weigh on demand.

Pending home sales fell 7.3% in September from the previous month and 11.3% year-over-year, with declines across all four regions. Higher mortgage rates continued to weigh heavily on affordability.