This Weekly Market Update reviews the top market headlines: Fed Chairman Signals Policy Plans, Corporate Buybacks on the Rise, Home Sales Tick Up In July

Top Three Market Headlines

Fed Chairman Signals Policy Plans: In a virtual symposium last Friday, Federal Reserve Chairman Jerome Powell stated that the Fed could begin tapering its monthly asset purchases of $120 billion later this year. While acknowledging that the Delta variant of Covid-19 poses a short-term risk, Mr. Powell noted that the employment landscape has improved in recent months. At the same time, he clarified that the central bank likely wouldn't begin raising interest rates until a later date. In addition, the Chairman echoed his comments from the Fed's late-July meeting that recent inflation numbers should prove transitory.

Corporate Buybacks on the Rise: Keyed by recovering profits, swelling cash balances, and access to cheap financing, corporate stock buybacks in 2021 are up 49% versus last year, according to data from Bank of America Securities. Financial firms have led the charge of late, recently posting their highest level of weekly buybacks since 2010 and registering the largest dollar amount of buybacks among different sectors so far this year. Banks, in particular, have been active acquirers of their own shares after being freed from buyback restrictions the Federal Reserve imposed in the beginning stages of the pandemic.

Home Sales Tick Up in July: The declining rate of home sales that began in late 2020 amid rapidly escalating prices and dwindling inventory appears to have leveled off, according to data released last week. The National Association of Realtors (NAR) reported that existing home sales rose 2% in July. This was the second straight monthly increase, though at 5,990 the level of sales remained well below the recent cycle high of 6,730 in October, 2020. New home sales, meanwhile, increased for the first time in four months, inching up 1% from June, according to the U.S. Census Bureau. After a prolonged decline, inventory levels have finally begun to pick up, with total housing inventory at the end of July standing 7.3% higher than the prior month, though still down 12.0% from the prior year, according to the NAR. 

As of August 30, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.43% 2.64% 15.26% 28.31%
S&P 500 2.37% 5.16% 21.20% 31.38%
Russell 2000 6.80% -1.32% 15.98% 47.06%
MSCI EAFE 1.78% 2.22% 11.24% 26.29%
MSCI Emerging Markets 3.30% -6.93% 0.00% 16.12%
FTSE NAREIT 1.17% 5.20% 28.30% 37.70%
Bloomberg Commodity 4.38% 1.92% 23.47% 32.77%
Barclays U.S. Aggregate -0.08% 0.92% -0.70% 0.21%

WSJ 8/27/2021, Barrons 08/25/2021, National Association of Realtors 8/23/2021, U.S. Census Bureau 8/24/2021. 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.