Top Three Market Headlines
Homebuilders Stay Busy in November: U.S. homebuilders were active in November, according to data released last week by the U.S. Census Bureau. Housing starts checked in at 1.37 million units (on a seasonally-adjusted annual basis), up 3.2% from October and 8.7% higher than a year ago. Activity picked up in both single-family construction, which hit a 10-month high, as well the volatile multifamily sector, which rose for the second straight month. The outlook for future construction also brightened, as building permits rose 1.4% and 11.1% from the prior month and prior year, respectively. Permits for single-family homes were particularly strong, jumping to their highest level since July 2007.
Swedish Central Bank Ends Negative Rate Policy: Sweden’s central bank last week announced that it was hiking its benchmark interest rate from -0.25% to 0%, thereby ending a five-year experiment with negative interest rates. With the move, the Riksbank became the first among several global central banks that have experimented with negative rates to reverse the policy, as rates remain negative in major economies such as Japan, Switzerland, and the euro zone. The decision came despite recent slowing of economic growth in the country, and was spurred in part by concerns about certain side effects the negative rates were inflicting on the Swedish economy, including inflating property prices and debt levels.
Manufacturing Rebounds but a New Headwind Emerges: After declining for two straight months, U.S. industrial production—a measure of output at factories, mines, and utilities—rebounded in November, rising 1.1% from October. Keyed by a bounce in motor vehicle output after the General Motors strike ended, this was the largest monthly increase since October 2017. However, a new threat to the industrial economy emerged last week with Boeing’s decision to suspend production of its troubled 737 Max airplane. The hiatus will reverberate throughout the manufacturing sector given the extended supply network supporting the plane’s production, with one economist estimating that it could impact Q1 2020 U.S. GDP by as much as a half percentage point should it last the full quarter.
Please note: This will be the last Weekly Market Update published in 2019. We would like to wish everyone a happy holiday season!
Data Points
- Housing starts rose 3.2% in November from the prior month
- The Swedish Central Bank raised its benchmark interest rate from -0.25% to 0%.
- Industrial production rose 1.1% in November from the prior month
|
As of December 20, 2019 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
2.76% |
8.46% |
26.02% |
27.46% |
|
S&P 500 |
2.46% |
8.71% |
31.05% |
33.21% |
|
Russell 2000 |
2.41% |
10.08% |
25.69% |
27.93% |
|
MSCI EAFE |
2.37% |
7.64% |
21.43% |
21.97% |
|
MSCI Emerging Markets |
5.68% |
10.94% |
17.48% |
18.46% |
|
FTSE NAREIT |
-1.62% |
-2.15% |
24.23% |
22.63% |
|
Bloomberg Commodity |
2.82% |
3.74% |
6.98% |
4.22% |
|
Barclays Aggregate |
-0.01% |
0.02% |
8.54% |
9.00% |
Federal Reserve 12/20/19, Barron’s 20/12/19, CNBC 12/17/19, CNBC 12/19/19, Financial Post 12/19/19, Riksbank 12/19/19. 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.