This Weekly Market Update reviews the top market headlines: Jobs Market Gains Momentum, U.S. Business Expansion Continues in June, U.S. Treasury Yields Decline Further
  • The U.S. added 850,000 in June, the largest monthly gain in 10 months
  • The ISM Manufacturing index registered 60.6 in June, while the ISM Services Index was 60.1
  • The 10-year Treasury yield hit an intraweek low of 1.25% last week, its lowest level since February

Top Three Market Headlines 

Jobs Market Gains Momentum: The U.S. labor market added 850,000 jobs in June, according to the Labor Department's monthly report released on July 2. The total, which beat economists' expectations of a 706,000 increase, was the largest monthly gain since August of 2020. The hospitality sector recorded the strongest growth as business activity picked up at bars, restaurants, and hotels. Despite the improved jobs numbers, the unemployment rate ticked up from 5.8% to 5.9% as the number of people seeking jobs rose. This rate is well below the April 2020 high of 14.7%, but remains above the February 2020 pre-pandemic rate of 3.5%.

U.S. Business Expansion Continues in June: The U.S. economy continued expanding in June, albeit at a slightly more modest pace, according to surveys of business executives by the Institute for Supply Management (ISM). The ISM Manufacturing index registered 60.6 in June, down marginally from 61.2 in May but still firmly in expansion territory. (A reading above 50 indicates an expansion of activity while a sub-50 mark reflects contraction.) Meanwhile, the ISM Services index registered a similar result of 60.1, though this was down from an all-time high of 64.0 in May. This marked the 13th consecutive month of expansion in each sector.

U.S. Treasury Yields Decline Further: U.S. Treasury bond yields tumbled last week, with the 10-year Treasury note yield dropping from 1.43% to an intraweek low of 1.25% before settling at 1.36% at week's end. This marked the seventh week out of the last eight that yields have declined, a reversal of trend from the first quarter of 2020 when yields rose sharply (the 10-year yield touched 1.74% in late March) as the economy reopened and inflation expectations rose. While some pundits credit the recent declines to a potential slowing of the U.S. economic recovery in the second half of the year and easing inflation fears, others have cited temporary supply/demand technical factors such as recent reductions in the issuance of bills and bonds by the U.S. Treasury.

As of July 12, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.21% 0.55% 12.92% 36.39%
S&P 500 0.42% 1.72% 17.24% 40.79%
Russell 2000 -1.11% -1.31% 16.00% 64.73%
MSCI EAFE -0.45% 0.39% 9.26% 30.93%
MSCI Emerging Markets -2.56% -3.94% 3.22% 24.39%
FTSE NAREIT 2.51% 3.38% 26.08% 45.23%
Bloomberg Commodity -1.56% -1.10% 19.81% 41.02%
Barclays U.S. Aggregate 0.31% 0.44% -1.18% -0.56%

CNBC 7/2/2021, WSJ 7/2/2021, WSJ 7/8/2021, MarketWtatch 7/8/2021, FactSet 7/12/2021. 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.