This Weekly Market Update reviews the top three market headlines; Housing Sales Continue to Climb, US Budget Gap Reaches $3.1 Trillion, Leading Economic Index Indicates Slowing U.S. Growth

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Data Points

Top Three Market Headlines

Housing Sales Continue to Climb: U.S. housing market activity rose to a 14-year high in September, marking the fourth straight month of growth. According to the National Association of Realtors, sales of existing homes, which make up a majority of housing transactions, rose 9.4% from the prior month to a seasonally-adjusted annual rate (SAAR) of 6.54 million units in September. Much of the housing market’s recent success can be attributed to record low interest rates, an uptick in demand from millennials entering the market, and homebuyers searching for more space as time spent at home increases due to the Coronavirus pandemic.

US Budget Gap Reaches $3.1 Trillion: The U.S. budget deficit tripled to a record $3.1 Trillion through the fiscal year ending September 30, as the U.S. government grappled with the coronavirus pandemic. The main contributor to the growing deficit was the Cares Act, a $2.2 Trillion coronavirus relief effort that Congress approved in March. Federal debt now totals 102% of gross domestic product, the first time it has grown larger than the size of the economy in 70 years. The unprecedented debt levels extend overseas; the International Monetary Fund announced that global public debt will likely approach a record 100% of output, but continued to encourage policymakers to maintain spending to aid a strong recovery.

Leading Economic Index Indicates Slowing U.S. Growth: The Leading Economic Index (LEI) for the U.S. increased in September by 0.7%, a slower pace compared to increases of 1.4% in August and 2% in July. The LEI, published monthly by The Conference Board, is intended to signal shifts in the business cycle based on a basket of 10 different economic and financial indicators. According to the latest report, declining unemployment claims and rising housing permits drove the increase in September. The report also notes that the decelerating pace of improvement could indicate that the economy is losing momentum as 2020 comes to an end.

As of October 23, 2020
Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.20% 3.03% 4.44% 12.03%
S&P 500 -0.51% 3.14% 8.88% 17.54%
Russell 2000 0.42% 8.85% -0.60% 7.16%
MSCI EAFE 0.11% 1.61% -5.60% -0.23%
MSCI Emerging Markets 1.11% 5.10% 3.88% 12.68%
FTSE NAREIT 0.26% 2.89% -15.16% -17.47%
Bloomberg Commodity 0.25% 3.84% -8.71% -6.26%
Barclays U.S. Aggregate -0.42% -0.41% 6.36% 6.72%

WSJ 10/22/20, WSJ 10/16/20, The Conference Board 10/22/20; 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.