This Weekly Market Update reviews the top market headlines: GDP Growth Slows in Q3, Consumer Confidence Improves, Personal Spending Rises

Top Three Market Headlines

GDP Growth Slows in Q3: The Commerce Department last week provided its first estimate of Q3 2021 U.S. gross domestic product (GDP), a measure of all goods and services produced. According to the report, GDP grew at an annualized pace of just 2.0% from July to September, a material slowdown from the Q2 pace of 6.7% and the weakest reading in five quarters. Growth in Q3 was impacted by both renewed Covid-19 restrictions and growing supply chain logjams. In particular, empty new car lots and parts shortages led to a dramatic decline in expenditures on motor vehicles and parts, which dragged overall consumer spending down to an annualized growth rate of 1.6% in Q3, versus 12% in the prior quarter.

Consumer Confidence Improves: Consumers in the U.S. demonstrated marginally greater optimism in October as anxieties surrounding the COVID-19 delta variant diminished. The Conference Board last week reported a modest increase in its Consumer Confidence Index from 109.8 in September to 113.8 in October. Survey results showed the proportion of consumers intending to purchase big-ticket items like homes and autos increased, while almost half of respondents indicated plans to take a vacation in the next six months, the highest level since February 2020. Despite the rebound, however, the Index remained below its post-pandemic high of 128.9 in June 2021.

Personal Spending Rises: The Bureau of Economic Analysis (BEA) reported last week that personal consumption expenditures (PCE), a measure of consumer spending for all goods and services, rose 0.6% in September compared to the prior month. The gain was driven by demand for services such as healthcare, food services, and hotel accommodations, which offset a decrease in durable goods purchases, which partly reflected tight inventories of motor vehicles and parts. The release also reported that the PCE Price Index rose 4.4% versus last year, equal to the prior month’s rate, reflecting sharp increases in energy and food prices.

As of November 1, 2021
Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.42%
5.10% 16.79%
S&P 500 1.35% 7.01% 24.04% 41.20%
Russell 2000 0.27% 4.25% 17.19% 48.58%
MSCI EAFE -0.11% 2.46% 11.01% 33.47%
MSCI Emerging Markets -2.18% 0.99% -0.27% 15.22%
FTSE NAREIT 0.22% 7.60% 32.51%
Bloomberg Commodity -0.38% 2.58% 32.46% 44.40%
Barclays U.S. Aggregate 0.52% -0.03% -1.58% -0.55%

BEA 10/29/2021, The Conference Board 10/26/21, WSJ 10/28/21. 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.