This Weekly Market Update reviews the top market headlines: July Jobs Report Beats Expectations, U.S. Economic Expansion Continues in July, Corporate Earnings Skyrocket in Q2

Top Three Market Headlines

July Jobs Report Beats Expectations: The Labor Department announced last Friday that U.S. employers added 943,000 jobs in July, beating economists' expectations of an increase of 845,000. All industries except for retail registered job growth in the month, with gains led by companies in the leisure and hospitality, local government education, and professional and business services industries. As of July, employment was up by 16.7 million since April 2020, but remained down by 5.7 million, or 3.7%, from pre-pandemic levels in February 2020. July's job gains drove the unemployment rate down to 5.4% from 5.9% in the prior month. Meanwhile, average hourly earnings also ticked up in July, supporting the idea that the labor market remains extremely tight.

U.S. Economic Expansion Continues in July: Business activity in the U.S. continued expanding in July, according to surveys of business executives released last week by the Institute for Supply Management (ISM). The ISM Manufacturing Index registered 59.5, down slightly from the June reading of 60.6 but still well above the 50 mark that distinguishes expansion from contraction. The services sector registered particularly strong growth in July as the ISM Services Index hit 64.1, an increase of four points compared to June and the highest reading recorded since the inception of the index in 2008.

Corporate Earnings Skyrocket in Q2: Corporate earnings rebounded at a steep pace in Q2 2021 compared to shutdown-impaired results in the prior year. With almost 90% of S&P 500 companies having reported Q2 earnings through last week, the year-over-year blended EPS growth rate (combining actual results with analyst estimates for the few companies yet to report) stands at 89%, well ahead of the estimate of 63.0% as of June 30. This would be the highest growth rate reported since Q4 2009. Analysts presently project full-year earnings growth for S&P 500 companies of 41.6%.

As of August 9, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.98% 1.68% 14.19% 31.31%
S&P 500 0.96% 3.36% 19.12% 34.53%
Russell 2000 0.98% -2.66 14.41% 47.05%
MSCI EAFE 1.05% 1.81% 10.80% 28.65%
MSCI Emerging Markets 1.18% -5.63 1.40% 18.98%
FTSE NAREIT 0.34% 5.17% 28.26% 39.17%
Bloomberg Commodity -1.65% 0.16% 21.34% 32.81%
Barclays U.S. Aggregate -0.42% 0.69% -0.92% -1.29%

Marketwatch 8/6/2021, Institute for Supply Management 8/4/2021, U.S. Bureau of Labor Statistics 8/6/2021, FactSet 8/6/2021. 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.