This Weekly Market Update reviews the top three market headlines; Stocks Recoup Yearly Losses Before Faltering, Federal Reserve Remains Dovish, Inflation Remains Restrained

Data Points

Top Three Market Headlines

Stocks Recoup Yearly Losses Before Faltering: Riding a swift and forceful rebound since its late-March lows, the S&P 500 Index for a brief period early last week had amazingly recouped the significant losses it endured in the first quarter market crash. After closing at a level of 3,232 last Monday, the S&P 500 showed a year-to-date total return of 0.9%, and the Nasdaq Composite Index also hit a record high on the same day. The rally has been keyed by, among other factors, anticipation of improving economic data as an increasing portion of the U.S. economy reopens. The market’s recovery was stunted, however, later in the week, as the S&P 500 fell nearly 6% on Thursday, reflecting the continued instability and volatility of markets as investors digest on-going developments related to COVID-19 case data, reopening plans, and economic indicators.

Federal Reserve Remains Dovish: The Federal Reserve last week reinforced its commitment to aggressive monetary stimulus measures to assist the U.S. economy’s recovery. For one, the Fed signaled its plans to keep interest rates near zero through at least 2022; Chairman Jerome Powell was quoted as saying “We’re not even thinking about raising rates.” In addition, the Central Bank announced it would maintain the current pace of asset purchases at $80 billion in Treasuries and $40 billion in mortgage securities a month, and reiterated its commitment to “using our tools to do whatever we can and for as long as it takes to provide some relief and stability.”

Inflation Remains Restrained: Inflation pressures in the U.S. remained subdued in May, according to two monthly price gauges released last week by the Bureau of Labor Statistics. The Consumer Price Index (CPI) fell 0.1% in May from the prior month, its third consecutive monthly decline, driven by a 3.5% drop in the price of energy, which more than offset increases in food and shelter indexes. The core CPI, which excludes the volatile food and energy categories, also declined 0.1% from the prior month. Compared to the prior year, the measures rose just 0.1% and 1.2%, respectively: for the latter, it was the smallest year-over-year increase since March 2011.

As of June 12, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -4.13% 17.22% -7.83% 2.67%
S&P 500 -4.73% 18.19% -4.98% 7.76%
Russell 2000 -7.89% 20.66% -16.28% -7.29%
MSCI EAFE -4.21% 13.93% -12.07% -4.03%
MSCI Emerging Markets -1.53% 16.85% -10.73% -1.40%
FTSE NAREIT -5.13% 14.68% -16.63% -11.81%
Bloomberg Commodity -1.52% 3.02% -20.98% -16.22%
Barclays U.S. Aggregate 0.72% 2.48% 5.71% 9.42%

Bureau of Labor Statistics 06/11/2020, WSJ 6/10/2020; 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.