This Weekly Market Update reviews the top three market headlines; Increasing Raw Material Prices Signals Economic Recovery, Personal Income Falls in May While Spending Surges, Tech Stocks Drive Index Divides

Data Points

Top Three Market Headlines

Increasing Raw Material Prices Signals Economic Recovery: As global industrial activity has begun to recover from COVID-19-induced economic shutdowns, rising demand for raw materials has pushed up prices for certain commodities utilized by the manufacturing sector. For instance, the price of West Texas Intermediate crude oil recently pierced $40 per barrel, up significantly from late April when the front-month futures contract for the commodity fell below $0. In addition, silver has risen more than 50% since early March, while copper and tin are each up approximately 25% over the same period.

Personal Income Falls in May While Spending Surges: Total personal income in the U.S. fell by 4.2% in May from the prior month, the Bureau of Economic Analysis (BEA) reported last week, as the one-time federal stimulus payments from the CARES Act started to fade. A decline in transfer payments, which had surged in April, more than offset an increase in unemployment insurance benefits. Meanwhile, the BEA also reported that consumer spending increased 8.2% in May from April, as all 50 states took at least partial steps to reopen their economies. Among hard goods, the largest spending increase occurred in vehicles, while in the services sector the biggest gains were seen in healthcare spending, food services, and accommodations.

Tech Stocks Drive Index Divides: The Nasdaq Composite index hit another record high last week, as the tech-heavy index continues to benefit from the substantial influence of strong-performing tech stocks such as Apple, Microsoft, Amazon, Alphabet, and Facebook. These five stocks, which account for approximately 40% of the Nasdaq index, have risen on average nearly 20% year-to-date in 2020, driving a 9% gain for the Nasdaq index through last week. Comparatively, the leading tech stocks comprise approximately 20% of the S&P 500 index, which is down almost 6% over the same period, while the Dow Jones Industrial Average, which includes only Apple and Microsoft, is down 8.3% for the year.

As of June 26, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -2.06%
17.11% -7.91% 1.23%
S&P 500 -2.86% 16.97% -5.95% 5.34%
Russell 2000 -2.80% 19.92% -16.79% -7.79%
MSCI EAFE -1.30% 14.76% -11.44% -4.47%
MSCI Emerging Markets -0.16% 18.45% -9.50% -2.39%
FTSE NAREIT -3.49% 8.67% -21.00% -13.91%
Bloomberg Commodity -2.09% 2.24% -21.58% -20.10%
Barclays U.S. Aggregate 0.21% 2.90% 6.14% 9.10%

BEA 6/26/20, WSJ 6/22/20, WSJ6/23/20. 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.