This Weekly Market Update reviews the top market headlines: Fed Confirms Tapering Plan, Service Sector Booms; Manufacturing Grows Steadily, Jobs Report Beats Expectations
  • The Federal Reserve will start tapering its monthly asset purchases by $15 billion per month
  • The ISM Services index rose to a record 66.7 in October
  • The U.S. added 531,000 jobs in October

Top Three Market Headlines

Fed Confirms Tapering Plan: The Federal Reserve last week approved a plan to scale back its quantitative easing, or bond buying, measures adopted in response to the Covid-19 pandemic. The central bank pledged to reduce its $120 billion of monthly purchases by $15 billion per month starting in November, thereby setting a pace that would end the stimulus entirely by June 2022. Fed Chairman Jerome Powell stated that officials had moved up the end-date for the bond-buying program to put themselves in a position to raise interest rates if necessary, though he reiterated that policy makers believe it is not yet time to increase rates as there is still progress to be made from an employment standpoint.

Service Sector Booms; Manufacturing Grows Steadily: U.S. economic activity continued to expand in October, according to surveys of business executives released last week by the Institute for Supply Management (ISM). The services sector showed particular strength, as the ISM Services index jumped from 61.9 in September to 66.7 in October, the highest reading since data collection for the index began in 1997. The ISM Manufacturing index, meanwhile, recorded 60.8 in October, down modestly from 61.1 the prior month but still in expansion territory (i.e., a reading above 50). This was the seventeenth straight month both indices indicated expansion.

Jobs Report Beats Expectations: The Labor Department reported last week that U.S. nonfarm payrolls grew by 531,000 in October, beating analysts' estimates of 450,000. The number of job additions was the highest in three months, even as previously announced gains for September and August were revised upward. The leisure and hospitality industry added the most jobs in October, followed by professional and business services, while employment in public education declined the most. For the month, the jobless rate fell to 4.6% from 4.8% in September, while average hourly earnings increased by 4.9% from the prior year.

 
As of November 8, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.62% 6.80% 18.68% 29.95%
S&P 500 2.03% 9.17% 26.56% 35.79%
Russell 2000 6.11% 10.62% 24.35% 48.27%
MSCI EAFE 1.64% 4.14% 12.83% 26.67%
MSCI Emerging Markets -0.04% 0.95% -0.31% 10.61%
FTSE NAREIT 1.79% 9.53% 34.88% 47.07%
Bloomberg Commodity -0.60% 1.97% 31.67% 44.40%
Barclays U.S. Aggregate 0.64% 0.61% -0.95% -0.52%

ISM 11/4/2021, CNBC 11/5/2021, WSJ 11/3/2021 ,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.