This Weekly Market Update reviews the top market headlines: Jobless Claims Drop to Lowest Level of the Pandemic, Suez Canal Trade at a Standstill, Bank Restrictions Lifted

Top Three Market Headlines 

Jobless Claims Drop to Lowest Level of the Pandemic: Last week’s jobless claims report indicated that initial unemployment claims in the U.S., a proxy for layoffs, fell to 684,000 for the week ended March 20. This was down from 781,000 for the prior week and was the lowest level since March of last year when pandemic-induced lockdowns drove millions of layoffs across the United States. The downtrend in claims reflects the labor market’s ongoing improvement as fiscal stimulus, vaccinations, and easing business restrictions all contribute to the economy’s recovery.

Suez Canal Trade at a Standstill: A 1,300-foot shipping container vessel has become lodged in the middle of the Suez Canal and is disrupting global supply chains for everything from oil to grains to cars. The Suez Canal is one of the busiest trade routes in the world, with nearly 12% of total global trade moving through its ports. The estimated cost of the canal blockage is upwards of $400 million an hour, and dislodging the massive ship could take as long as a week. Suppliers anticipate the delay will increase shipping costs, adding to inflationary pressure on supply chains. In addition to halting roughly $9 billion of trade a day that passes through the canal, the dilemma is exacerbating a global shortage of shipping containers.

Bank Restrictions Lifted: The Federal Reserve said last week that it plans to lift temporary restrictions on banks’ ability to pay dividends and buy back stock. The restrictions, imposed last year as a way to maintain banks’ strength amid economic shutdowns, will be lifted after June 30 of this year for institutions that maintain proper capital levels as evaluated through stress tests performed by the Fed. The Fed’s decision added fuel to the strong rally in bank shares this year that has been spurred by the steepening of the yield curve: the Invesco KBW Bank ETF jumped nearly 5% in the ensuing days after the Fed’s announcement and has now gained approximately 25% year-to-date.

As of March 26, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.32% 4.51% 4.51% 52.96%
S&P 500 1.58% 6.20% 6.20% 53.72%
Russell 2000 -2.88% 12.71% 12.71% 90.49%
MSCI EAFE -0.55% 3.72% 3.72% 45.16%
MSCI Emerging Markets -2.16% 1.55% 1.55% 56.84%
FTSE NAREIT 2.76% 10.38% 10.38% 39.78%
Bloomberg Commodity -0.46% 7.80% 7.80% 32.99%
Barclays U.S. Aggregate 0.35% -3.28% -3.28% 1.72%

WSJ 3/25/21 Bloomberg 03/25/21, WSJ 03/26/21, CNBC 03/26/2, WSJ 3/25/20211. 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.