This Weekly Market Update reviews the top market headlines: U.S. GDP Surges in Q1, Federal Reserve Holds Steady, Consumer Confidence Jumps

Top Three Market Headlines 

U.S. GDP Surges in Q1: The Bureau of Economic Analysis (BEA) reported last week that U.S. real (inflation-adjusted) gross domestic product (GDP), a measure of all goods and services produced, expanded at a seasonally-adjusted annual rate (SAAR) of 6.4% in the first quarter of 2021. This was an increase from 4.3% in Q4 of 2020, and reflected “the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic,” according to the BEA’s report. A bulk of the increase came from consumer spending, which grew at an annualized pace of 10.7%. The price index for gross domestic purchases increased at a SAAR of 3.8% in Q1, more than double last quarter’s reading of 1.7%. The 6.4% increase leaves our nation’s economy only 1% away from the peak reached in late 2019.

Federal Reserve Holds Steady: The Federal Reserve’s policy-setting committee met last week and decided to keep the federal-funds rate near zero and maintain its current bond-buying pace of $120 billion per month. While noting that indicators of economic activity and employment have strengthened, Chairman Jerome Powell said “(t)he economy is a long way from our goals,“ and that the Fed intends to maintain an accommodative stance until its target outcomes for labor market conditions (maximum employment) and inflation (moderately above 2% for some time) are achieved. Regarding the latter, the Fed acknowledged that inflation has risen, but reiterated its belief that the increase thus far is largely due to transitory factors.

Consumer Confidence Jumps: Consumers’ optimism about the U.S. economy expanded sharply in April amid increasing vaccinations and continued loosening of pandemic restrictions. The Conference Board reported last week that its Consumer Confidence Index rose to 121.7 in April from 109.7 in March. This was the fourth straight monthly increase and the index’s highest level since February 2020. Showing particular strength, the Present Situations Index, a measure of current business and labor conditions, surged to 136.9 in April from 110.1 in March.

As of April 30, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.24% 4.37% 9.14% 50.90%
S&P 500 0.04% 5.34% 11.84% 49.89%
Russell 2000 -0.23% 2.10% 15.07% 85.94%
MSCI EAFE -0.76% 3.01% 6.59% 46.09%
MSCI Emerging Markets -0.37% 2.49% 4.83% 56.44%
FTSE NAREIT 1.42% 8.06% 17.64% 46.43%
Bloomberg Commodity 2.22% 8.29% 15.78% 50.14%
Barclays U.S. Aggregate -0.18% 0.79% -2.61% -0.27%

WSJ 4/28/21, Franklin Templeton 04/28/21, WSJ 4/30/21 WSJ 04/27/21, BEA 4/29/21, The Conference Board, 4/27/21, Federal Reserve 4/28/21, CNBC 4/28/21. 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.