This Weekly Market Update reviews the top three market headlines: Fed Chairman Reports on the Economy, Small Business Optimism near Record Highs to Start 2020, European Industrial Production Slips

Data Points

Top Three Market Headlines

Fed Chairman Reports on the Economy: Federal Reserve Chairman Jerome Powell visited Capitol Hill last week to provide his semiannual report on the U.S. economy and monetary policy to a pair of U.S. congressional committees. The Chairman testified that the U.S. economy proved resilient to global headwinds that intensified last summer, highlighting, in particular, the strength of the labor market. At the same time, Mr. Powell noted that inflation remained below the Fed’s 2% objective throughout 2019, and cautioned that business investment and exports were weak during the second half of the year. Lastly, the Chairman said the central bank is closely monitoring the coronavirus, “which could lead to disruptions in China that spill over to the rest of the global economy.”

Small Business Optimism near Record Highs to Start 2020: Small business owners entered 2020 with a bullish attitude, as reported by the NFIB Research Foundation in its January Small Business Optimism Index report. The index rose 1.6 points from the prior month to 104.3, which fell within the top 10% of all readings in the 46-year history of the survey. Six of the 10 index sub-components improved, including strong increases in sales expectations and business investment. More than a quarter of owners reported that finding qualified workers was their most significant problem, and historically high percentages of owners plan to raise wages in an attempt to fill open jobs.

European Industrial Production Slips: Business conditions deteriorated across European industrial companies late last year, as industrial production—a measure of the volume of output at factories, mines and public utilities—fell 2.1% across the Euro area in December. The decline was keyed by a 4% plunge in capital goods output, the steepest contraction in the sector since February 2016. Pressure was seen across the monetary union, as Germany, France, Italy and Spain all experienced production contractions exceeding 2%. Amid uncertainty about the impact of the coronavirus on European manufacturers’ exports and supply chains, economists have lowered their expectations of Eurozone growth just a month ahead of the European Central Bank’s next monetary policy meeting.

As of February 14, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.18% 2.75% 2.75% 19.63%
S&P 500 1.65% 4.87% 4.87% 25.57%
Russell 2000 1.90% 1.27% 1.27% 10.81%
MSCI EAFE -0.02% -0.30% -0.30% 14.20%
MSCI Emerging Markets 1.37% -0.70%  -0.70%  9.21%
FTSE NAREIT 3.36% 6.27% 6.27% 18.26%
Bloomberg Commodity 0.87% -6.62% -6.62% -3.81%
Barclays U.S. Aggregate 0.03% 1.88% 1.88% 9.55%

NFIB Eurostat ,2/12/2020,Federal Reserve, 2/11/20. 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.