This Weekly Market Update reviews the top three market headlines; U.S. Economy Recovery Remains on Track, U.S. Auto Sales Rebound, U.S. Job Market Improvement Continues

Data Points

Top Three Market Headlines

U.S. Economy Recovery Remains on Track: The U.S. economy continued to claw its way back in July from the COVID-19-induced contraction endured in the spring, according to two widely-followed surveys released last week. The Institute for Supply Management (ISM) reported that its Manufacturing Index, based on surveys of manufacturing company executives, registered 54.2 for July, marking the second straight month of expansion (a reading above 50 indicates growth of activity, while a reading below 50 reflects contraction). Improving conditions also extended to the service sector for the second straight month, as the ISM’s Services Index registered 58.1 in July, its highest reading in 17 months.

U.S. Auto Sales Rebound: In a sign of recovering consumer sentiment, U.S. auto sales rose by 11.3% in July from the prior month to 14.5 million (SAAR) units. While still below pre-COVID-19 levels, auto sales continue to rebound from their April lows, having recorded gains in each of the last three months. Passenger vehicles led the gains in July, increasing 17.8%, followed by light trucks, which grew 9.8%. Light trucks accounted for almost 76% of total sales, three percentage points higher compared to one year ago. The uptick in auto sales, combined with coronavirus-induced production constraints, have driven inventories down to an eight-year low.

U.S. Job Market Improvement Continues: The Labor Department reported last Friday that U.S. nonfarm payrolls grew by 1.8 million in July. This was the third straight month of employment gains, reflecting the continued resumption of economic activity that had been curtailed by business shutdowns in the wake of COVID-19. However, there are still about 13 million fewer jobs than existed in February, the month before the U.S. economy largely shut down. Key areas exhibiting job gains in July included hospitality, government, retail, business services, and health care. Meanwhile, the unemployment rate fell for the third straight month in July to 10.2%, down from 14.7% in April, but remained far above the historically low rate of 3.5% in February before the pandemic hit.

As of August 7, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.08%
7.48% 0.76% 13.60%
S&P 500 2.49% 8.27% 4.93% 18.54%
Russell 2000 6.03%
8.96% -5.18% 6.12%
MSCI EAFE 1.95% 4.33% -7.50% 3.95%
MSCI Emerging Markets 0.99% 10.02% -0.75% 14.69%
FTSE NAREIT 1.63% 5.74% -14.04% -9.61%
Bloomberg Commodity 2.58% 8.44% -12.60% -6.29%
Barclays U.S. Aggregate 0.10% 1.60% 7.83% 8.56%

WSJ 08/03/2020, TD Economics 08/03/2020, Barrons 8/3/2020, MarketWatch 8/5/2020, WSJ 8/7/2020,. 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.