Top Three Market Headlines
U.S. Home Sales Register Annual Gains: U.S. housing turnover maintained an upward trend in September versus the prior year even while softening modestly from August. The number of previously-owned homes sold in September fell 2.2% from August, the first monthly decline in three months; however, sales rose almost 4% versus the prior year. Similarly, new home sales decreased by 0.7% in September from August, but rose at a healthy 15.5% year-over-year pace. Reflecting the stronger activity compared to the prior year, the national median sale price of existing homes rose 5.9% on an annual basis in September, the strongest pace of appreciation since January 2018.
Federal Reserve to Boost Overnight Liquidity: The Federal Reserve last week began injecting additional funds into short-term borrowing markets in order to facilitate the operation of the markets and financial institutions’ access to liquidity. Specifically, beginning last Thursday the Fed increased the amount of its overnight repurchase agreement, or “repo,” operations to $120 billion from $75 billion. Fed repo operations supply liquidity to financial markets by loaning cash to eligible banks in return for Treasury debt that effectively functions as collateral for the loans. The increase, according to the Fed, is intended to “mitigate the risk of money market pressures” that could cause the federal funds borrowing rate (an intra-bank overnight lending rate) to deviate from the range the Fed targets for the rate as part of its monetary policy.
U.S. Consumers Remain Optimistic: Encouraged by the strong job market and personal income growth, U.S. consumers continue to feel optimistic about economic conditions, according to The Consumer Sentiment Index released by the University of Michigan last Friday. The Index reading of 95.5 in October was higher than the month prior and nearly identical to the 2019 average of 95.6. The survey suggested that consumers remain sensitive to ongoing trade disputes, but the overwhelming majority remains optimistic due to low unemployment rates, rising personal income, and manageable levels of consumer debt.
Data Points
- New home sales rose 15.5% in September from the prior year
- The Federal Reserve increased its overnight repurchase operations from $75 billion to $120 billion
- October’s Consumer Sentiment Index increased 2.5% from the prior month
|
As of October 25, 2019 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
1.25% |
2.21% |
18.77% |
12.90% |
|
S&P 500 |
1.23% |
1.64% |
22.54% |
14.02% |
|
Russell 2000 |
1.53% |
2.37% |
16.89% |
5.42% |
|
MSCI EAFE |
1.26% |
2.97% |
16.15% |
12.31% |
|
MSCI Emerging Markets |
1.17% |
3.60% |
9.69% |
12.01% |
|
FTSE NAREIT |
0.01% |
1.07% |
28.32% |
21.61% |
|
Bloomberg Commodity |
1.09% |
2.33% |
5.53% |
-3.91% |
|
Barclays Aggregate |
-0.15% |
-0.32% |
8.17% |
10.59% |
National Association of Realtors, 10/22/2019, Census Bureau, 10/24/2019; WSJ 10/23/2019; CNBC 10/25/2019. 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.