This Weekly Market Update reviews the top three market headlines; Retail Sales Dip, Federal Reserve Pledges to Maintain Monetary Stimulus, Tesla Set to Join S&P 500 Index

Data Points

Top Three Market Headlines

Retail Sales Dip: The U.S. Department of Commerce reported last week that spending at online retailers, restaurants, and brick-and-mortar stores fell 1.1% in November from the prior month. In addition, the Department revised downward its report of October sales to -0.1%. The recent slowdown, which halted five straight months of growth through September, comes amid the reported increase in Covid-19 cases that prompted renewed restrictions on consumer and business activity in parts of the U.S. Despite the slowdown versus the prior month, however, sales in November were nonetheless 4.1% higher than the prior year’s pace.

Federal Reserve Pledges to Maintain Monetary Stimulus: The Federal Reserve said last week that it will continue to purchase Treasury and mortgage-backed securities at a pace of $120 billion a month while also keeping the federal-funds rate near zero. Fed officials also provided more clarity on the purchases, stating they would continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” Additionally, Fed Chairman Jerome Powell once again stressed the need for fiscal support.

Tesla Set to Join S&P 500 Index: Tesla, whose stock has posted an astronomical return of approximately 650% year-to-date, will be added to the S&P 500 index on Monday, December 21. With a market capitalization of around $600 billion, Tesla is projected to immediately be the index’s 7th largest stock and the most valuable company to ever join. There is an estimated $4.5 trillion worth of funds that track the index, and Tesla’s entry will lead to billions of dollars in trade activity as index funds position Tesla as their 7th largest holding.

Please note: This will be the last Weekly Market Update that will be published in 2020. We would like to wish everyone a happy holiday season!
As of December 18, 2020
Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.61% 13.48% 15.04% 16.28%
S&P 500 1.29% 10.71% 16.88% 18.39%
Russell 2000 3.09% 30.98% 19.60% 20.20%
MSCI EAFE 2.01% 15.14% 6.98% 7.83%
MSCI Emerging Markets 0.89% 17.42% 16.06% 16.90%
FTSE NAREIT 0.47% 9.59% -9.63% -7.31%
Bloomberg Commodity 3.28% 9.15% -4.04% -3.09%
Barclays U.S. Aggregate -0.08% 0.31% 7.12% 7.37%

WSJ 12/16/2020. Bloomberg 12/17/2020, SPGlobal 12/17/2020, Federal Reserve 12/16/2020 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.