Top Three Market Headlines
Job Market Closes 2019 On a Historic Note: The Labor Department reported last Friday that U.S. employers added 145,000 jobs in December, driven by growth in seasonal retail trade and health care workers. This represented a decline from November’s strong pace of 256,000 jobs, and left the trailing three-month average at 184,000. For the full year, the U.S. economy added 2.3 million jobs, the 10th straight year of gains, which is the longest stretch in 80 years of data. Meanwhile, the unemployment rate remained unchanged in December at 3.5%, the lowest mark since 1969, while average hourly earnings advanced 2.9% from a year earlier, a modest slowdown from the 3.1% annual pace seen in November.
Slowdown Persists in the Manufacturing Sector: The Institute for Supply Management (ISM) reported recently that its Manufacturing Purchasing Managers’ Index (PMI) fell to 47.2 in December from 48.1 in the prior month. Reflecting the strains of on-going trade tensions on U.S. factories, this was the lowest reading for the gauge in more than 10 years and its fifth straight month below the neutral threshold of 50 that distinguishes expansion (above 50) from contraction (below 50) in the sector. In contrast, the U.S. services sector remained on solid footing heading into 2020, as the ISM’s Non-Manufacturing Index climbed to 55.0 in December, up from 53.9 in November.
U.S. Trade Deficit Shrinks in November: U.S. tariffs against Chinese products prompted a 1.0% decrease in imports to the U.S. in November, while U.S. exports rose by 0.7% over the same period, producing an 8.2% contraction in the U.S. trade gap versus the prior month. The decline in imports stemmed from lesser shipments of capital and consumer goods, such as computers and cell phones, while the exports boost came from goods such as oil-field equipment and automobiles. November’s report suggests trade will have a positive contribution on U.S. gross domestic product growth in the fourth quarter after a mild drag in the third quarter. However, economists expect the decline in Chinese imports to subside in early 2020, due to implementation of the impending phase-one trade deal between the two countries.
Data Points
- U.S. employers added 2.3 million jobs in 2019
- The ISM Manufacturing Index fell to 47.2 in December, its lowest reading since 2009
- The U.S. trade deficit contracted by 8.2% in November from the prior month
|
As of January 10, 2020 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
0.67% |
0.95% |
0.95% |
23.01% |
|
S&P 500 |
0.98% |
1.13% |
1.13% |
28.30% |
|
Russell 2000 |
-0.18% |
-0.62% |
-0.62% |
16.35% |
|
MSCI EAFE |
-0.09% |
0.19% |
0.19% |
17.60% |
|
MSCI Emerging Markets |
0.88% |
1.72% |
1.72% |
16.46% |
|
FTSE NAREIT |
-0.01% |
-0.61% |
-0.61% |
20.29% |
|
Bloomberg Commodity |
-0.78% |
-0.18% |
-0.18% |
3.67% |
|
Barclays U.S. Aggregate |
-0.09% |
0.45% |
0.45% |
9.20% |
ISM 1/10/2020, WSJ 1/10/2020, MarketWatch 1/10/2020, WSJ 1/7/2020; 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.