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Monthly Market Monitor - October 2010

Market Indices1SeptemberYear-to-Date
S&P 500+8.92%+3.89%
MSCI EAFE+9.80%-1.25%
Barclays U.S. Aggregate Bond+0.11%+7.94%

U.S. equity markets quickly reversed the August market selloff and posted strong returns for the month of September, with the S&P 500 Index returning +8.9%. The rally broke the historical trend for the month of September typically being the worst performing month of the twelve, as the broad market’s +8.9% advance was the index’s best September return in 71 years, and furthermore, its third best monthly absolute return during the past 10 years. For the decade, only the months of April 2009 (+9.4%) and March 2000 (+9.7%) saw better returns. The primary catalysts driving September’s performance were: 1) a number of improving economic signposts that lessened double-dip recession fears, 2) stabilization of the European sovereign debt crisis, and 3) a sharp increase in mergers and acquisitions (M&A) activity.

Developed equity markets outside the U.S. posted similar strong returns for September, as the MSCI EAFE Index returned +9.8%, and emerging markets, as measured by the MSCI Emerging Markets Index, posted a very strong return of +10.9%. U.S. fixed income markets posted modest positive return for the month as the Barclays U.S. Aggregate Bond Index posted +0.1% gain, adding to the year’s solid return of +7.9%.

  1. Morningstar Direct

Prepared by:Richard Anderson, Equity Research Director and Alex Kaye, CFA, Head of Research Research Department, Cetera Financial Group

If you have any questions, please contact Scott Rivera, Cetera Financial Group, at (310) 257-7689.The views are those of Richard Anderson, Equity Research Director and Alex Kaye, CFA, Head of Research, Research Department, Cetera Financial Group, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

All economic and performance information is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot directly invest in unmanaged indices. Please consult your financial advisor for more information.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards.

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