This Weekly Market Update reviews the top three market headlines: Global Economies Impacted by Lockdown Measures, U.S. Congress Approves $484 Billion Relief Bill, Risk Assets Rebound from March Lows

Data Points

Top Three Market Headlines

Global Economies Impacted by Lockdown Measures: Results of a series of regional business surveys released last week gave further evidence of the economic toll of lockdown measures across global economies. IHS Markit reported that its Eurozone composite Purchasing Managers Index (PMI), based on survey data collected from businesses, fell to 13.5 in April, the lowest level since July 1998, and down sharply from 29.7 in March and 51.6 in February. Similar dynamics were observed elsewhere around the globe, as composite PMI readings sank to record lows in both the U.K and Japan.

U.S. Congress Approves $484 Billion Relief Bill: On the heels of the $3.2 billion CARES Act passed in late March, the U.S. Congress last week approved an additional $484 billion economic package designed to provide further relief for entities impacted by the COVID-19 pandemic. The bill, signed by President Trump on Friday, will replenish both the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) with $350 billion and $60 billion, respectively. The PPP helps small businesses cover payroll costs while the EIDL provides grants to help eligible businesses to overcome a temporary loss in revenue. The remaining amount of the bill will be distributed to hospitals and health care providers and also fund efforts to increase COVID-19 testing nationwide.

Risk Assets Rebound from March Lows: Over the last five weeks, risk assets (e.g., equities and riskier sectors of the bond market) have posted a solid rebound that has offset some of the effects of their precipitous plunge from late February through late March. Through last Friday, the S&P 500 Index had recovered by 27% from its recent-cycle low on March 23, 2020, leaving its YTD total return at -11.7%. Corporate bond sectors, including investment grade and high yield corporate bonds, have also benefited, as both the Bloomberg Barclays Corporate Index and Bloomberg Barclays High Yield Index had gained almost 13% from March 23 through last Friday, leaving their YTD returns at 1.5% and -9.5%, respectively.

As of April 27, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.57% 6.93% -15.91% -7.85%
S&P 500 -1.30% 9.88% -11.66% -1.13%
Russell 2000 0.33% 6.99% -25.76% -21.19%
MSCI EAFE -2.02% 1.93% -21.34% -14.83%
MSCI Emerging Markets -2.40% 3.77% -20.72% -16.74%
FTSE NAREIT -4.90% 1.67% -26.09% -19.40%
Bloomberg Commodity -2.98% -2.61% -25.29% -24.79%
Barclays U.S. Aggregate 0.24% 1.78% 4.99% 11.01%

Markit Economics 04/23/2020, Wall Street Journal 04/24/2020, Morningstar 04/23/2020; 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.