The top three market headlines: Retail Sales Rebound, U.S. Manufacturing Slips, IPO Market Heats Up
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Retail Sales Rebound: After having declined in two of the three prior months, retail sales rebounded in March, rising 1.6% from February. This result, which outpaced consensus estimates, was aided by a 3.5% rise in auto sales; however, even after excluding auto and fuel sales from the data, retail sales still grew at a 0.9% pace for the month. Growth was broad-based in the quarter, with sales rising for almost every type of store. Some analysts suggested that the uptick could have been related to consumers’ receipt of tax refunds, which has driven retail sales data in prior years. The strong report led some economists to increase their estimates for Q1 gross domestic product growth.

U.S. Manufacturing Slips: The slowing global economy is having spillover effects on U.S. manufacturing production. According to data released last week by the Federal Reserve, output of U.S. manufacturers declined at an annual rate of 1.1% in Q1 2019, the first such drop since Q3 of 2017. Particular product areas that have been weak lately include wood products and motor vehicles, each of which fell over 2% in March. After a strong 2018, the manufacturing sector is feeling the economic slowdown that has been occurring in Europe and Asia, caused in part by trade tensions and tariffs affecting businesses. While manufacturing production makes up a small portion of the U.S. gross domestic product, it is highly sensitive to movements in global demand.

IPO Market Heats Up: Benefiting from the strong year-to-date rebound in stock prices and dampened market volatility, the initial public offering (“IPO”) market has picked up steam in 2019. Several big tech names have highlighted recent issuance activity, including Pinterest and Zoom Video Communications. Ride-hailing firm Uber also recently announced plans to go public this year. While some new issues have struggled―for example, Lyft, currently trades 17% below its late-March IPO price―IPOs in general have enjoyed a solid year so far, according to Dealogic, which reports that share prices of companies that have gone public in 2019 are up 12% from their IPO prices.

As of April 19, 2019

Week

Quarter-To-Date

Year-To-Date

One-Year

MSCI All Country World

0.10%

2.70%

15.20%

2.96%

S&P 500

-0.07%

2.59%

16.59%

10.05%

Russell 2000

-1.20%

1.73%

16.57%

0.85%

MSCI EAFE

0.33%

2.62%

12.86%

-4.19%

MSCI Emerging Markets

0.34%

3.33%

13.58%

-5.47%

FTSE NAREIT*

-2.91%

-1.67%

14.39%

18.13%

Bloomberg Commodity

-1.17%

0.90%

7.28%

-7.15%

Barclays Aggregate

0.06%

-0.35%

2.58%

4.79%

*Returns as of April 18, 2019

WSJ 4/18/2019, 4/18/2019, 4/18/2019; Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.