Top Three Market Headlines
Housing Market Perks Up: A series of reports last week reflected increased activity in the U.S. housing market, indicating that declining mortgage rates may be having a positive impact on the market. Existing home sales, which make up the majority of housing transactions, rose in October by 1.9% and 4.6%, respectively, versus the prior month and October of last year. Home builder activity also picked up, as builders started construction on 1.3 million new homes in the U.S. in October, up 3.8% from September and 8.5% from October of last year. In addition, permits for future construction of homes rose 5% to 1.5 million in October, the highest level since 2007.
Central Bank Likely to Stand Pat: Last week saw the release of minutes from the Federal Reserve’s last policy meeting in late October, at which the Fed decided to cut its policy rate (the federal funds rate) for the third time this year. The minutes revealed that there were mixed views among Fed governors about the latest rate cut, with some members unsupportive of the move. There was greater consensus about the forward-looking outlook, however, as the minutes reflected that most participants believed the central bank’s current policy stance would be “well calibrated” to support an outlook of moderate growth, a strong labor market, and inflation near the Fed’s 2% objective. These comments indicate that the Fed is likely to pause for the foreseeable future with regard to additional rate actions.
Leading Economic Index Falls for Third Straight Month: The Conference Board’s Leading Economic Index (LEI) for the U.S. fell 0.1% in October from September, the third straight monthly decline. For the first time since May 2016, the six-month growth rate for the index turned negative, recording a 0.1% decline. The LEI forecasts economic activity by tracking 10 leading indicators such as manufacturing hours, building permits, consumer expectations, and credit conditions. October’s decline was driven by weaknesses in new orders for manufacturing, weekly hours, and unemployment insurance claims.
Please note: There will be no Weekly Market Update published next Monday, December 2. We would like to wish everyone a happy Thanksgiving!
Data Points
- New home construction rose 3.8% in October, while building permits rose to a 12-year high
- The current federal funds target rate range is 1.50% - 1.75%
- The Leading Economic Index recorded a growth rate of -0.1% over the most recent six-month period
|
As of November 22, 2019 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
-0.33% |
4.57% |
21.50% |
16.13% |
|
S&P 500 |
-0.29% |
4.79% |
26.33% |
19.78% |
|
Russell 2000 |
-0.45% |
4.48% |
19.29% |
8.35% |
|
MSCI EAFE |
-0.58% |
4.22% |
17.57% |
12.86% |
|
MSCI Emerging Markets |
-0.02% |
4.91% |
11.09% |
10.24% |
|
FTSE NAREIT |
-1.14% |
-1.81% |
24.66% |
16.94% |
|
Bloomberg Commodity |
-0.43% |
1.46% |
4.64% |
-3.45% |
|
Barclays Aggregate |
0.29% |
0.10% |
8.63% |
10.81% |
Marketwatch 11/20/19, 11/21/19, Bloomberg 11/19/19; The Conference Board 11/22/19, The Federal Reserve, 11/22/19. 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.