This Weekly Market Update reviews the top market headlines: Consumer Prices Climb Higher, Oil Rallies to Highest Price Since 2018, Retail Sales Forecast Rises for 2021

Top Three Market Headlines 

Consumer Prices Climb Higher: In a closely-watched report, the Bureau of Labor Statistics said last week that the U.S. Consumer Price Index (CPI) rose 0.6% in May from April and 5.0% compared to May 2020, the largest annual increase since 2008. Core CPI, which strips out the effects of volatile food and energy prices, rose 0.7% in May from April and 3.8% over the prior year, the highest rate since 1992. Surging used car prices (up 7.3% in May) had a meaningful impact on the overall CPI measure for the second straight month, accounting for roughly one-third of the monthly CPI increase in May. Prices for furniture, airline fares, and apparel also rose notably from the previous month.

Oil Rallies to Highest Price Since 2018: After plunging more than 20% in 2020, oil prices have rallied to multi-year highs in 2021. The price of West Texas Intermediate crude, the U.S. market benchmark, surpassed $71.00 per barrel last week, up from $48.35 at the start of the year, representing a gain of almost 50%. This marked the highest price since October of 2018, as the reopening of economies drives demand for the commodity while production resumes at a slower pace. Looking ahead, OPEC predicted last week that oil consumption will grow by five million barrels a day through the second half of 2021.

Retail Sales Forecast Rises for 2021: Based on indications of expanding economic activity, the National Retail Federation (NRF) last week raised its annual retail sales forecast for 2021. The NRF now expects retail sales—which includes purchases made both online and in stores while excluding sales at restaurants, car dealers and gas stations—to rise between 10.5% and 13.5% in 2021, up from its prior forecast of 6.5%. The heightened growth expectation would mark the fastest rate in the U.S. since 1984. The NRF also increased its projection for full-year GDP growth to nearly 7%, compared with the 4.4%-to-5.0% rate it expected earlier this year.

As of June 11, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.46% 7.24% 12.15% 41.92%
S&P 500 0.43% 7.22% 13.84% 43.73%
Russell 2000 2.18% 5.35% 18.73% 74.11%
MSCI EAFE 0.34% 7.85% 11.60% 35.24%
MSCI Emerging Markets 0.08% 5.40% 7.81% 41.94%
FTSE NAREIT 3.03% 15.64% 25.90% 44.37%
Bloomberg Commodity 0.32% 13.84% 21.72% 48.33%
Barclays U.S. Aggregate 0.47% 1.72% -1.71% -0.20%

WSJ 6/08/21, WSJ 6/10/21, Reuters 6/11/21, OPEC 6/10/21; 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.