This Weekly Market Update reviews the top market headlines: Inflation Hits a 30-Year High, Home Prices Continue Rising Rapidly in the Third Quarter, Corporate Earnings Maintain Strong Pace in Q3
  • The Consumer Price Index rose 0.9% in October from the prior month and 6.2% on an annual basis
  • The median sales price of single-family existing homes rose at a 16% annual pace in Q3
  • The Q3 2021 earnings growth rate for S&P 500 companies currently stands at 39.1%

Top Three Market Headlines

Inflation Hits a 30-Year High: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.9% in October from the prior month, an acceleration from the 0.4% pace in September. The "core" CPI, which excludes energy and food costs, rose 0.6%, also faster than the prior month's 0.2% rate. Compared to the prior year, the broad CPI was up 6.2% and the core measure rose 4.6%, the highest rates for each since November 1990 and August 1991, respectively. Price increases were broad-based in October across multiple product areas, including energy (gasoline prices are up almost 50% from last year), shelter, food, new and used vehicles, and medical care, among others.

Home Prices Continue Rising Rapidly in the Third Quarter: The National Association of Realtors (NAR) reported last week that home prices continued to rise at a strong pace in the third quarter, owing to on-going solid demand and limited housing supply. According to the NAR, the median sales price of single[1]family existing homes climbed 16% versus the prior year during Q3, following a 23% annual rise in the prior quarter. The median price increased in 99% of all measured markets in Q3, and all four major U.S. regions showed double-digit year-over-year price growth. Austin, Texas saw the strongest increase among metro areas, posting a 33.5% gain over the prior year.

Corporate Earnings Maintain Strong Pace in Q3: Corporate earnings continued their hearty rebound in 3Q 2021. With 92% of S&P 500 companies having reported Q3 earnings through last week, the year-over-year blended EPS growth rate (combining actual results with analyst estimates for the few companies yet to report) stands at 39.1%, beating the estimate of 27.4% as of September 30. If the growth rate holds as the remaining companies report, the 3Q increase would mark the third-highest year-over-year earnings growth rate since the birth of the metric in 2010, trailing only the two previous quarters this year. The sectors with the highest Q3 annual growth rates include energy, materials, and industrials.

As of November 15, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.01% 6.79% 18.67% 27.74%
S&P 500 -0.27% 8.88% 26.21% 34.32%
Russell 2000 -1.00% 9.52% 23.11% 42.58%
MSCI EAFE -0.34% 3.78% 12.45% 20.81%
MSCI Emerging Markets 1.71% 2.68% 1.40% 10.98%
FTSE NAREIT -0.01% 9.52% 34.87% 40.59%
Bloomberg Commodity 0.60% 2.03% 31.75% 39.51%
Barclays U.S. Aggregate -0.75% -0.14% -1.69% -0.93%

NAR 11/10/2021, Factset 11/12/2021, WSJ 11/10/2021, Bloomberg 11/10/2021, US Dept., of Labor 11/10/2021. 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.