Top Three Market Headlines
Federal Reserve Cuts Interest Rates: As expected, the Federal Reserve last week announced a quarter-percentage point cut to the target federal-funds rate, to a range of 2.00% to 2.25%. Characterized as a “mid-cycle adjustment” by Fed Chairman Jerome Powell, the decision is viewed an effort to buffer against a global economic slowdown and ongoing trade tensions. Mr. Powell conveyed that while officials aren’t ruling out additional cuts, they also do not view Wednesday’s action as “the beginning of a long series of rate cuts.” The Fed has indicated that it will continue to assess incoming information regarding the U.S. economic outlook and act as appropriate to sustain expansion.
Jobs Market Steady in July: Last week’s monthly jobs report from the U.S. Labor Department reflected steady employment conditions in the U.S. in July. Employer payrolls rose by 164,000 in the month, in line with projections. Gains were led by service providers, notably education and health services, which tend to be less exposed to economic cycles. On the other hand, retail payrolls fell for the sixth straight month. The jobless rate remained at 3.7%, near its 50-year low, while wages rose 3.2% from a year earlier, consistent with recent trends.
U.S. Stokes Trade Battle with China: President Trump last week raised the stakes in the on-going U.S.-China trade dispute, abruptly announcing on Thursday that the U.S. would impose 10% tariffs on an additional $300 billion of imports from China, beginning Sept. 1. The move comes on top of 25% tariffs the U.S. previously applied to $250 billion of Chinese imports, and would thus extend U.S. tariffs to virtually all goods from China. Whereas the first round of tariffs was more focused on industrial goods, the next round would impact more consumer goods. The announcement triggered hasty late-week declines in both stocks and bond yields and raised the prospect of a prolonged spat between the two nations.
Data Points
- Last week’s interest rate cut marked the first time since 2008 the Fed has reduced rates.
- U.S employers added 164,000 new jobs in July.
- The U.S. announced 10% tariffs on $300 billion worth of goods from China
|
As of August 2, 2019 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
-3.10% |
-1.59% |
14.38% |
1.45% |
|
S&P 500 |
-3.07% |
-0.19% |
18.32% |
5.83% |
|
Russell 2000 |
-2.85% |
-2.03% |
14.61% |
-7.53% |
|
MSCI EAFE |
-2.65% |
-3.00% |
10.61% |
-2.89% |
|
MSCI Emerging Markets |
-4.24% |
-4.37% |
5.75% |
-3.55% |
|
FTSE NAREIT |
0.85% |
1.67% |
19.74% |
11.86% |
|
Bloomberg Commodity |
-1.88% |
-2.85% |
2.07% |
-6.47% |
|
Barclays Aggregate |
0.98% |
0.97% |
7.14% |
9.00% |
Bloomberg 8/2/2019, MarketWatch 8/2/2019 WSJ 7/31/2019; 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.