This Weekly Market Update reviews the top three market headlines: Small Business Optimism Picks Up, Inflation Remains Under Wraps , Mortgage Lenders See Demand Surge.
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Small Business Optimism Picks Up: Despite the recent recurrence of trade tensions, small business owners in the U.S. have grown more optimistic lately. The National Federation of Independent Business reported last week that its Small Business Optimism Index, which is based on surveys of small business owners, climbed to a seven-month high of 105.0 in May, not far below its multi-year high of 108.8 last August. According to the survey, the recent bounce has been aided by increases in capital outlays. Meanwhile, small business owners reported higher expectations for sales, business conditions and expansion, and also noted that earnings, job creation and compensation all remain very strong.

Inflation Remains Under Wraps: Inflation pressures in the U.S. remained subdued in May, according to two monthly price gauges released last week by the Bureau of Labor Statistics. The broad consumer-price index (CPI) rose a mere 0.1% in May from April, or 1.8% on an annual basis, while the so-called core CPI, which excludes often-volatile energy and food prices, also rose at a monthly pace of just 0.1%, or 2.0% annually. Meanwhile, the producer-price index (PPI), a measure of the prices businesses pay for their goods and services, also rose only 0.1% May, or 1.8% annually, while the core PPI measure rose 0.2% monthly and 2.3% annually, the latter of which was a deceleration from a pace of 2.8% recorded last December. These latest readings will be the last inflation indicators Federal Reserve officials will see before meeting during the week of June 17th to decide whether to cut interest rates or keep rates steady.

Mortgage Lenders See Demand Surge: Falling mortgage rates may soon provide the housing industry with a much-needed shot in the arm, if recent mortgage application data are any indication. During the week ended June 7th, the average 30-year fixed mortgage rate fell to a near two-year low of 4.12% (down from 4.83% one year earlier), triggering a spike in mortgage applications of 27% from the prior week and 41% from the same week one year ago, according to the Mortgage Bankers Association.  Refinancing activity was particularly strong during the week, surging 47% and 97% from the prior week and prior year, respectively. Even applications to buy a home picked up, rising 10% over both the prior week and prior year. 

As of June 14, 2019

Week

Quarter-To-Date

Year-To-Date

One-Year

MSCI All Country World

0.30%

1.08%

13.38%

0.39%

S&P 500

0.53%

2.32%

16.29%

5.87%

Russell 2000

0.58%

-0.86%

13.60%

-8.36%

MSCI EAFE

-0.26%

0.77%

10.83%

-4.44%

MSCI Emerging Markets

0.89%

-3.48%

6.09%

-7.48%

FTSE NAREIT

0.80%

3.60%

21.40%

18.71%

Bloomberg Commodity

0.93%

-3.53%

2.57%

-10.74%

Barclays Aggregate

0.02%

2.19%

5.20%

7.41%


CNBC 06/12/2019 WSJ 6/13/2019 Bloomberg 6/11/2019, NFIB 6/11/2019. 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.