This Weekly Market Update reviews the top three market headlines; Small Business Optimism Improves, U.S. Industrial Production Rebounds in June, Retail Sales Show Further Recovery in June

Data Points

  • The NFIB Index increased 6.2 points to 100.6 in June from the prior month
  • U.S. industrial production rose by 5.4% in June, beating analysts’ expectations of a 4.1% increase
  • Retail sales rose 7.5% in June from the prior month
 
Top Three Market Headlines


Small Business Optimism Improves: U.S. small business owners showed more optimism in June for the second straight month. The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index, which is based on surveys of small business owners, climbed 6.2 points to 100.6 in June from the prior month; in the month of April, the Index had fallen to seven-year lows amid the global coronavirus pandemic. While many of the individual sub-components of the Index remain at historic lows, eight of 10 improved in June, highlighted by strong increases in job creation and sales expectations.

U.S. Industrial Production Rebounds in June: According to data released last week by the Federal Reserve, business conditions continue to improve in June across U.S. industrial companies, as industrial production—a measure of factory, mining and utility output—rose 5.4% from the prior month, beating economists’ forecasts of a 4.1% gain. The sharp increase in production was led by motor vehicles and parts, as employees began to return to work post-lockdown. Additionally, capacity utilization in the industrial sector rose 3.5 percentage points to 68.6%; increases in this measure generally signal rising levels of employment and capital spending.

Retail Sales Show Further Recovery in June: After declining precipitously in March and April amid COVID-19 containment restrictions on business, U.S. retail sales have now increased for two straight months. The Commerce Department reported last week that retail sales rose 7.5% in June from May and 1.1% from a year ago. Excluding the volatile auto and fuel categories, sales jumped 6.7% from May and 1.6% from last year. In a turnabout from prior months, sales at internet retailers declined 2.4% in June, as consumers began venturing out of their homes to shop at businesses that had resumed in-store operations.

As of July 17, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.18%
 4.52% -2.02% 5.80%
S&P 500 1.27% 4.10% 0.89% 10.22%
Russell 2000 3.57%
 2.26% -11.01% -3.58%
MSCI EAFE 2.20% 4.12% -7.69% -1.00%
MSCI Emerging Markets -1.22% 6.45% -3.96% 2.47%
FTSE NAREIT 1.07% -0.20% -18.87% -14.68%
Bloomberg Commodity -0.21% 2.34% -17.51% -15.46%
Barclays U.S. Aggregate 0.23% 0.78% 6.96% 9.67%
Census Bureau 07/16/2020, NFIB data 07/16/2020, Federal Reserve 7/15/2020. 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.