This Weekly Market Update reviews the top market headlines; Labor Market Slowdown Extends into 2021, ISM Indices Reflect Continued Expansion, Oil and Natural Prices on the Upswing

Top Three Market Headlines 

Labor Market Slowdown Extends into 2021: The Labor Department reported last week that U.S. nonfarm payrolls rose by only 49,000 in January, and also raised its estimate of job losses in December to 227,000 from the 140,000 figure previously reported. From November through January, the U.S. added only 86,000 jobs, a sharp deceleration from the post-shutdown pace experienced from May through October of last year. While jobs grew in business and professional services in January, many other sectors saw losses, including leisure and hospitality, retailers, health-care companies, and warehouses.

ISM Indices Reflect Continued Expansion: The U.S economy continued to expand in January, according to surveys of business executives released last week from the Institute of Supple Management (ISM). The ISM Manufacturing index registered 58.7 in January, only slightly lower than 60.5 in the prior month. (A reading above 50 indicates expansion of activity while a sub-50 mark reflects contraction.) The services sector also expanded in January as the ISM Services index came in at 58.7, the highest reading since February 2019. This was the eighth consecutive month both indices reflected expansion.

Oil and Natural Prices on the Upswing: Energy commodities have recorded solid price gains to start 2021. U.S. West Texas Intermediate crude oil futures closed last week at $56.85 per barrel, their highest level in over a year and up 17% from their $48.52 December close. Gains last week came after OPEC+ agreed to maintain a reduced output policy, while reduced U.S. crude oil stockpiles also supported prices. Meanwhile, natural gas futures prices closed last week at $2.86 per million British thermal units, up 15% year-to-date. Much of this increase came last week amid updated forecasts for colder weather in the U.S.

 

As of February 5, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 4.32% 3.84% 3.84% 18.92%
S&P 500 4.67% 3.61% 3.61% 18.70%
Russell 2000 7.72% 13.14% 13.14% 34.55%
MSCI EAFE 2.75% 1.66% 1.66% 10.36%
MSCI Emerging Markets 4.96% 8.18% 8.18% 30.92%
FTSE NAREIT 3.38% 3.48% 3.48% -7.13%
Bloomberg Commodity 2.96% 5.67% 5.67% 10.61%
Barclays U.S. Aggregate -0.39% -1.11% -1.11% 4.84%

WSJ 2/3/2020, WSJ 2/5/2021, CNBC 2/3/2021, MarketWatch 2/4/2021, WSJ 2/4/2021, FactSet. 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.