This Weekly Market Update reviews the top market headlines: Inflation Hits a 39-Year High, Initial Jobless Claims Reach Record Low, China Eases Liquidity Amid Real Estate Default

Top Three Market Headlines

Inflation Hits a 39-Year High: The Consumer Price Index (CPI) rose 0.8% in November from the prior month, a slight decrease from the 0.9% pace in October, the U.S. Department of Labor reported last week. The "core" CPI, which excludes energy and food costs, rose 0.5%, also slightly lower than the prior month's 0.6% reading. Compared to the prior year, the broad CPI was up 6.8% and the core measure rose 4.9%, the highest rate for each since June 1982 and June 1991, respectively. Similar to last month, the largest contributors to the heightened rate included gasoline, shelter, food, used cars and trucks, and new vehicles.

Initial Jobless Claims Reach Record Low: According to the U.S. Department of Labor, the number of first-time jobless claims, a proxy for layoffs, fell to 184,000 in the U.S. for the week ended December 4, the lowest figure in more than 50 years. The average number of claims over the prior four weeks through the same date was 218,750, the lowest four-week average since the start of the pandemic. While partly a function of holiday seasonal volatility, the low figure also reflects businesses' reluctance to lay off workers amid a tight labor market and strong consumer demand.

China Eases Liquidity Amid Real Estate Default: After months of speculation, China Evergrande, one of the world's largest real estate developers, defaulted on its debt obligations last week. The Chinese developer has become the most indebted company in the world over the past few years, owing more than $300 billion. Market observers are closely assessing potential ramifications of the default, not just in China but globally. Amid escalating pressures on the country's real estate sector, the Chinese central bank announced last week it would lower the reserve requirement for Chinese banks―or the level of cash reserves a bank must hold in liquid assets―thereby releasing liquidity into the Chinese economy.

As of December 13, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 3.06% 5.39% 17.11% 20.02%
S&P 500 3.85% 9.69% 27.16% 30.31%
Russell 2000 2.45% 0.53% 13.00% 16.17%
MSCI EAFE 2.44% 0.60% 8.99% 11.53%
MSCI Emerging Markets 1.15% -0.97% -2.20% 0.79%
FTSE NAREIT 2.56% 10.43% 35.98% 38.98%
Bloomberg Commodity 1.15% -3.82% 24.19% 29.45%
Barclays U.S. Aggregate -0.72% -0.12% -1.67% -1.34%

US Dept. of Labor 12/10/2021, Bloomberg 12/6/2021, NY Times 12/9/2021, Wall Street Journal 12/9/2021. 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