This Weekly Market Update reviews the top three market headlines; U.S. Job Market Shows Further Rebound, U.S. Manufacturing Improves in June, Gold Reaches a Nine-Year High

Data Points

Top Three Market Headlines

U.S. Job Market Shows Further Rebound: The Labor Department reported last week that U.S. nonfarm payrolls grew by 4.8 million in June, well ahead of the 3.0 million increase economists had expected. This was the second straight month of gains, highlighting the job market’s gradual rebound from coronavirus-induced business shutdowns. Notably, however, the 7.5 million jobs added in May and June combined are still well short of the 22 million jobs lost in March and April. Not surprisingly, the leisure and hospitality sectors, which were impacted the most by shutdown measures, accounted for 40% of the job growth in June. Meanwhile, the unemployment rate fell to 11.1% in June, down from 13.3% in May, but remained far above the 3.5% rate that existed in February before the pandemic hit. 

U.S. Manufacturing Improves in June: U.S. manufacturing showed signs of recovery in June as governments eased restrictions designed to contain the coronavirus outbreak. The Institute for Supply Management (ISM) reported that its Manufacturing Index registered 52.6 in June, indicating expansion in the sector for the first time since February (a reading above 50 indicates expansion, while a reading below 50 reflects a contraction in activity). Of 18 industries surveyed, 13 reported growth for the month of June, highlighted by textile mills, wood products, and furniture and related products. The report also indicated strong improvements in sub-index readings for employment, production, new orders, and prices. 

Gold Reaches a Nine-Year High: Prices on futures contracts for gold briefly touched $1,800 per ounce last week for the first time since 2011 on swelling demand. With ETF holdings of the metal having grown daily for the past six weeks, gold has rebounded strongly from a brief March swoon, and through last week had gained 17% year-to-date. Key factors spurring investor interest include aggressive global monetary policies that have produced negative real interest rates in many areas (thereby softening the opportunity cost of holding a non-yielding asset such as gold), as well gold’s appeal as a safe haven asset amid ongoing financial market volatility, economic uncertainty, and geopolitical strains.
As of July 3, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 3.31%
1.48% -4.86% 2.10%
S&P 500 4.07% 0.98% -2.13% 6.57%
Russell 2000 3.90% -0.65% -13.54% -7.57%
MSCI EAFE 1.48 1.37% -10.13% -4.99%
MSCI Emerging Markets 3.65% 3.98% -6.19% -0.13%
FTSE NAREIT 5.02% 2.06% -17.03% -13.67%
Bloomberg Commodity 3.82% 1.01% -18.58% -16.09%
Barclays U.S. Aggregate 0.12% 0.12% 6.26% 8.53%

WSJ 7/2/20, CNBC 7/1/2020, Morningstar 7/1/2020, WSJ 6/30/20, FOXBusiness 7/1/20. 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.