This Weekly Market Update reviews the top three market headlines; Retail Sales Jump in September, IMF Upgrades Global Economic Outlook, Rising Used Vehicle Prices Drive Higher Consumer Prices

Data Points

  • Retail sales rose 1.9% in September from the prior month
  • The IMF now predicts that world GDP will decline by 4.4% in 2020
  • The Consumer Price Index increased 1.4% in September from the prior year

Top Three Market Headlines

Retail Sales Jump in September: According to the U.S. Department of Commerce, spending at online retailers, restaurants, and brick-and-mortar stores increased 1.9% in September from the prior month, marking the fifth straight month of expansion and the fastest pace in three months. Versus the prior year, sales rose a hearty 5.4%. Excluding the often-volatile categories of automobiles and fuel, sales rose 1.5% from August and 5.9% over the prior year. Areas of strong growth in September included clothing, which picked as cooler weather begins to approach, along with sales in bars and restaurants, with more establishments opening up following state-mandated lockdowns.

IMF Upgrades Global Economic Outlook: The International Monetary Fund (IMF) predicted last week that the global economic collapse spurred by COVID-19 will not be as severe as previously estimated. According to the IMF, the world’s gross domestic product is now forecasted to decline by 4.4% in 2020, a better scenario than the 5.2% drop that was predicted in June. Several factors have bolstered the IMF’s global outlook, including unprecedented global fiscal and monetary intervention and a swift economic recovery in China, which is predicted to be the only major economy to grow this year, mainly because it reopened first.

Rising Used Vehicle Prices Drive Higher Consumer Prices: The consumer price index (CPI) rose a seasonally adjusted 0.2% in September over the prior month, a deceleration from the 0.4% rise in August. The rate of increase over the prior year was 1.4%, a modestly larger increase than the 1.3% rise in August. Rising used vehicle prices served as a key factor behind the index’s rise in September, jumping 6.7% for the month. After excluding the food and energy sectors, the “core” rate rose 0.2% in September and 1.7% versus the prior year. Offsetting some of the effect of rising used vehicles, prices for apparel, airline fares, and motor vehicle insurance have declined over the last 12 months.

 
As of October 16, 2020
 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.25% 3.23% 4.64% 12.94%
S&P 500 0.21% 3.67% 9.45% 18.76%
Russell 2000 -0.22% 8.40% -1.01% 8.67%
MSCI EAFE -1.45% 1.50% -5.70% 0.51%
MSCI Emerging Markets 0.15% 3.95% 2.74% 12.24%
FTSE NAREIT -3.26% 2.63% -15.37% -16.13%
Bloomberg Commodity 0.18% 3.58% -8.94% -5.66%
Barclays U.S. Aggregate 0.24% 0.01% 6.81% 7.20%

BLS 10/13/2020 Marketwatch 10/16/20, WSJ 10/13/20. 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.