Top Three Market Headlines
Mixed Picture for U.S. Housing in June: Data released last week painted a mixed picture of the state of the U.S. housing market. Existing home sales in June were 5.27 million (on a seasonally-adjusted annual basis), down 1.7% from May and 2.2% from June, 2018; this was the 16th consecutive month in which existing home sales were lower than their pace in the prior year. On the other hand, new home sales reversed a two-month decline, increasing by roughly 7% in June to a seasonally-adjusted annual rate of 646,000. Regions that posted solid gains included Western and Southern states. Housing market participants are hopeful that lower mortgage rates, continued low unemployment and rising wages will provide a boost to the market as the year progresses.
Q2 2019 GDP Report Beats Expectations: The U.S. Department of Commerce last week issued its first estimate of U.S. gross domestic product (GDP) growth for Q2 2019. According to the report, which will be updated twice more in upcoming months as more data is released, Q2 GDP grew at an annualized rate of 2.1%. While this was ahead of economists’ expectation of a 1.8% increase, it represents a slowdown from the pace of the last two quarters (3.1% and 2.2% for Q1 2019 and Q4 2018, respectively). During Q2, consumer spending increased 4.3%, its strongest pace in four years; however, exports fell 5.2% and nonresidential fixed investment fell 0.6%.
The ECB Prepares to Lower Rates: The European Central Bank (ECB) announced last week that it is preparing to cut its benchmark short-term interest rate for the first time since 2016 at its next meeting on September 12th. The central bank also said it will examine the possibility of restarting its bond-buying program. The bank’s shift, which comes as economic pressures mount in Europe from slowing exports, manufacturing and ongoing Brexit uncertainty, is intended to increase inflation closer to the bank’s target of approximately 2%. As central banks across Asia, Europe and the U.S. all signal potential rate cuts, the possibility of returning to an ultralow rate environment around the globe increases.
Data Points
- New home sales rose 7% in June from the prior month, while existing home sales fell 1.7%.
- U.S. gross domestic product grew at an annualized rate of 2.1% in the second quarter of 2019.
- The European Central Bank’s current short-term interest rate is -0.4%.
As of July 26, 2019
Week
Quarter-To-Date
Year-To-Date
One-Year
MSCI All Country World
0.77%
1.55%
18.03%
3.86%
S&P 500
1.66%
2.97%
22.06%
8.81%
Russell 2000
2.02%
0.84%
17.97%
-5.54%
MSCI EAFE
-0.20%
-0.36%
13.61%
-1.51%
MSCI Emerging Markets
-0.77%
-0.14%
10.43%
-1.24%
FTSE NAREIT
0.78%
0.81%
18.74%
12.11%
Bloomberg Commodity
-0.76%
-0.98%
4.03%
-5.14%
Barclays Aggregate
-0.03%
-0.02%
6.09%
7.97%
WSJ 07/24/2019, 7/25/2019, 07/26/2019, MarketWatch 07/24/2019; 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.