This Weekly Market Update reviews the top market headlines: Inflation Pressures Grow in February, Additional Fiscal Stimulus Bill Finalized, NASDAQ Index Sees Correction

Top Three Market Headlines 

Inflation Pressures Grow in February: Product price data released last week pointed to a gradual acceleration in inflation in February as the economy continued to reopen. According to the Department of Labor (DOL), the Consumer Price Index (CPI) rose by 1.7% over the prior year, faster than the 1.4% pace recorded in January. Over the 12 months through February, the food and energy indexes increased 3.6% and 2.4%, respectively. Compared to the prior month, gasoline prices surged 6.4% in February. The rise in inflation was more pronounced at the producer level, as the DOL reported that the Producer Price Index (PPI) jumped 2.8% in February from the prior year, the largest increase since October 2018.

Additional Fiscal Stimulus Bill Finalized: The latest coronavirus relief bill, sporting a $1.9 trillion price tag, was finalized and signed into law by the U.S. government last week. The package, the third passed in the last 12 months, provides additional direct payments to consumers, extended jobless benefits, money for coronavirus test sites, and financial aid to state and local governments, among other things. As the bill had been widely anticipated by Wall Street, its passage had little direct impact on markets, though investors will be closely monitoring its effect on consumer spending in upcoming months.

NASDAQ Index Sees Correction: Driven by a recent sell-off in technology stocks, the NASDAQ Composite Index officially entered into correction territory last Monday, finishing down 10.6% from its February 12 record high. Technology stocks, which comprise approximately 50% of the index, have come under pressure lately as rising bond yields have led investors to question valuations in the sector. The correction proved short-lived, however, as the index rallied 3.7% the following day and went on to recover almost 6% through the end of the week. Notwithstanding its recent weakness, the index’s trailing one-year return as of week’s end remained a stout 85%, reflecting its vigorous rebound since mid-March of last year.

As of March 12, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.62% 4.63% 4.63% 59.98%
S&P 500 2.69% 5.33% 5.33% 61.78%
Russell 2000 7.36% 19.33% 19.33% 112.16%
MSCI EAFE 3.00% 3.68% 3.68% 52.04%
MSCI Emerging Markets 0.70% 4.64% 4.64% 55.97%
FTSE NAREIT 5.15% 9.51% 9.51% 31.11%
Bloomberg Commodity 0.12% 10.14% 10.14% 30.06%
Barclays U.S. Aggregate -0.43% -3.35% -3.35% 0.88%

Bloomberg 3/12/21 WSJ 3/10/21, WSJ 3/11/2021, 3/8/2021. 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.