Top Three Market Headlines
ECB Leaves Monetary Policy Unchanged: The European Central Bank (ECB) announced last week that it plans to maintain its ultra-loose interest rate policy until the region’s inflation outlook converges towards the bank’s target of just below 2%. Specifically, the ECB said the Eurozone key deposit rate will remain at -0.5%, while also stating that the net purchases of Eurozone bonds under its quantitative easing (QE) program will continue at a monthly pace of €20 billion a month “as long as necessary.” At the same time, the bank noted that it believes risks to growth have become less pronounced amid receding trade uncertainty.
Brexit Passes Last Remaining Steps: After a nearly four-year saga, the last remaining steps for the United Kingdom to leave the European Union (EU) on January 31 were finalized last week. The Brexit Withdrawal Agreement passed through the U.K. Parliament and was signed by Queen Elizabeth II. One last vote from the European Parliament, which is considered a formality, is all that remains. The divorce deal covers payments to the EU and citizens’ rights after Brexit. U.K. Prime Minister Boris Johnson will now focus on the future relationship between the two sides, with negotiations yet to occur on issues such as trade and security.
Coronavirus Threatens Chinese Economy: Already facing its lowest growth rate in 30 years, China’s economy is facing the recent outbreak of coronavirus, a respiratory virus. The epidemic, which hit right at the start of Lunar New Year festivities, has already put a significant damper on several industries, including travel, tourism, and entertainment. As millions of Chinese citizens are restricted from traveling, experts say the lack of economic activity could have a negative effect on the overall Chinese economy and impact the country’s 2020 GDP growth rate. Mainland Chinese markets ended the week on a low note, as the benchmark Shanghai Composite Index had its worst Lunar New Year’s eve in its 30-year history, falling nearly 3% before the start of the scheduled seven-day trading break.
Data Points
- The ECB kept its benchmark interest rate at -0.5%
- The U.K. Parliament voted 23-3 in favor of the Brexit Withdrawal Agreement
- The Shanghai Composite Index fell nearly 3% on the eve of the Lunar New Year
|
As of January 24, 2020 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
-1.02% |
1.48% |
1.48% |
21.92% |
|
S&P 500 |
-1.01% |
2.10% |
2.10% |
27.24% |
|
Russell 2000 |
-2.19% |
-0.33% |
-0.33% |
15.17% |
|
MSCI EAFE |
-0.61% |
0.42% |
0.42% |
17.29% |
|
MSCI Emerging Markets |
-2.39% |
0.46% |
0.46% |
12.66% |
|
FTSE NAREIT |
0.74% |
2.85% |
2.85% |
21.79% |
|
Bloomberg Commodity |
-3.10% |
-4.31% |
-4.31% |
-1.60% |
|
Barclays U.S. Aggregate |
0.79% |
1.30% |
1.30% |
9.66% |
Europa 1/24/20, WSJ 1/24/20. Bloomberg 1/23/19, WSJ 1/22/19, Barron’s 1/24/20. 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.