Top Three Market Headlines
Federal Reserve Enacts A Third Rate Cut: The Federal Reserve last week cut its benchmark interest rate for the third time this year, reducing the target federal funds rate by 0.25%, leaving it at a range of 1.50% to 1.75%. While acknowledging that the U.S. economy is experiencing “a sustained expansion of economic activity and a strong labor market,” Fed Chairman Jerome Powell explained that the central bank took this step “to help keep the U.S. economy strong in the face of global developments and to provide insurance against ongoing risks,” such as weakness in global growth and trade developments. That said, the Chairman also indicated that this will likely be the last rate cute for the foreseeable future unless economic data deteriorates.
U.S. Economy Continues to Grow in Third Quarter: The U.S. economy continued to grow in the third quarter, albeit at a modestly slower pace. The U.S. Department of Commerce last week released its first estimate of Q3 gross domestic product (GDP), which indicated that the economy grew at a 1.9% annualized pace (adjusted for inflation) in the quarter, down slightly from 2.0% in Q2. Growth in the third quarter was fueled by government and consumer spending, which rose 2.0% and 2.9%, respectively. Conversely, business spending fell for the second straight quarter, suggesting that business executives are increasingly hesitant to spend amid slowing global economic growth and trade tensions.
October Jobs Report Surpasses Expectations: The Labor Department announced last Friday that U.S. employers added 128,000 jobs in October, outpacing economists’ expectations. In addition, previously-reported figures for September and August were revised upward by 95,000. Increased employment in the business services, hospitality, and health care sectors drove October’s increase in hiring, while manufacturing jobs lagged due to the labor strike at General Motors. The unemployment rate was little changed at 3.6% versus 3.5% in September, reflecting continued strength in the U.S. labor market.
Data Points
- The Federal Reserve cut its benchmark interest rate by 0.25%
- Consumer spending helped GDP grow 1.9% during the third quarter
- The U.S. economy has added 176,000 jobs per month over the last three months
|
As of November 1, 2019 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
1.34% |
3.58% |
20.35% |
12.37% |
|
S&P 500 |
1.49% |
3.16% |
24.36% |
14.23% |
|
Russell 2000 |
1.99% |
4.41% |
19.21% |
4.39% |
|
MSCI EAFE |
1.18% |
4.19% |
17.53% |
10.99% |
|
MSCI Emerging Markets |
1.30% |
4.94% |
11.12% |
10.83% |
|
FTSE NAREIT |
0.31% |
1.39% |
28.72% |
23.14% |
|
Bloomberg Commodity |
0.99% |
3.34% |
6.58% |
-1.79% |
|
Barclays Aggregate |
0.47% |
0.15% |
8.68% |
11.25% |
WSJ 10/30/2019, 11/1/2019, Bloomberg 10/30/2019, DOL 11/1/2019, Federal Reserve, 10/30/2019, Bureau of Economic Analysis, 10/30/2019. 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.