This Weekly Market Update reviews the top three market headlines; U.S. Manufacturing and Services Continue Expanding, U.S. Auto Sales Rebound Strongly, Reports Reflect Economic Recovery for China

Data Points

Top Three Market Headlines

U.S. Manufacturing and Services Continue Expanding: The U.S. manufacturing and services sectors continued to recover in September from the Covid-19-induced business shutdowns experienced earlier in the year, according to data released last week. The Institute for Supply Management (ISM) reported that its Purchasing Managers Index (PMI) of manufacturing, which is based on surveys of business executives, registered 55.4 in September, while the services PMI increased to 57.8 from 56.9 in the prior month. An index reading above 50 indicates expansion, while a reading below 50 indicates contraction. This was the fourth straight positive monthly reading for each of the indicators. 

U.S. Auto Sales Rebound Strongly: U.S. auto sales finished the third quarter at a strong pace, totaling 16.3 million units (on a seasonally-adjusted annual basis), according to the U.S. Bureau of Economic Analysis. This was the fifth straight monthly increase, and was only 3% below the level seen in February before Covid-19 restrictions slammed the brakes on industry activity. Fueled by pent-up consumer demand and easy credit conditions, sales for the third quarter as a whole averaged 15.4 million units per month, a 36% increase from the 11.3 million average rate in Q2. 

Reports Reflect Economic Recovery for China: After contracting significantly in the first quarter of 2020 amid the Covid-19 outbreak, the Chinese economy has steadily rebounded over subsequent months. After plummeting to 35.7 in February, the Purchasing Managers Index (PMI) for manufacturing enterprises in China has exceeded 50 for seven consecutive months, indicating continued expansion in the sector. Related, official Chinese government statistics reflect that industrial production has risen at a year-over-year pace for five consecutive months. The recovery also seemingly extends to the services sector, as the non-manufacturing PMI rose to 55.9 in September, the seventh straight 50-plus reading for this measure as well.

As of October 12, 2020 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 3.66%
3.48% 4.90% 16.36%
S&P 500 3.89% 3.46% 9.22% 21.39%
Russell 2000 6.40%
8.64% -0.80% 12.27%
MSCI EAFE 2.98% 2.99% -4.31% 5.50%
MSCI Emerging Markets 3.78% 3.79% 2.59% 15.60%
FTSE NAREIT 1.50% 6.09% -12.52% -12.93%
Bloomberg Commodity 4.94 3.39% -9.10% -5.30%
Barclays U.S. Aggregate -0.17% -0.22% 6.55% 6.31%

National Association of Realtors 09/22/20, Census Bureau 09/24/20, Bloomberg 9/23/20, U.S. Bureau of Labor Statistics, 10/2/20. 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.