This Weekly Market Update reviews the top market headlines: Beige Book Sounds Cautionary Tone, Producers Face Continued Pricing Pressures, Natural Gas Prices Rally

Top Three Market Headlines

Beige Book Sounds Cautionary Tone: The Federal Reserve last week released its most recent Beige Book, a compilation of anecdotal information about current economic conditions collected eight times a year by the 12 Federal Reserve Districts. The report indicated that developing pressures have hindered the economic recovery in recent months, including the effect of the Covid-19 delta variant on spending for tourism, dining out, and travel. In addition, on-going supply problems and labor shortages have dented production in some sectors and driven costs higher, which companies reported they are covering by hiking prices.

Producers Face Continued Pricing Pressures: The Bureau of Labor Statistics (BLS) last week reported August figures for the Producer Price Index (PPI), which measures the average change in prices received by domestic producers. The index rose 0.7% from the prior month (seasonally adjusted), a slight downshift from June and July, which saw increases of 1.0% each. The core index, excluding food and energy, also decelerated, rising 0.6% in August versus increases of 1.0% in each of the prior two months. Despite the slowing monthly advance, however, annual price gains were the highest since 2010, with the broad and core indices rising 8.3% and 6.7%, respectively, over the prior year.

Natural Gas Prices Rally: Natural gas prices hit a seven-year high last week as the benchmark futures contract briefly surpassed $5.00 per million British thermal units (mmBtu). Prices have surged approximately 25% since late August and are now more than double their level of 12 months ago. Keying the rally has been rising international demand, which has spurred greater U.S. exports of liquefied natural gas. This has drained U.S. supplies, which was reflected in a report last week from the U.S. Energy Information Agency that the level of natural gas in underground storage was 7.4% below the five-year average. This shortfall is not likely be overcome in the near-term, as about three-quarters as production in the Gulf of Mexico remains off-line due to Hurricane Ida.

As of September 13, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.21% 2.71% 15.35% 32.36%
S&P 500 -1.68% 4.04% 19.91% 35.54%
Russell 2000 -2.80% -3.43% 13.50% 49.25%
MSCI EAFE -0.31% 3.74% 12.90% 28.40%
MSCI Emerging Markets -0.47% -4.20% 2.94% 22.99%
FTSE NAREIT -4.12% 4.33% 27.24% 39.22%
Bloomberg Commodity -0.01% 2.72% 24.44% 35.91%
Barclays U.S. Aggregate 0.02% 0.88% -0.74% -0.21%

WSJ 9/8/20201, 9/11/2021, CNBC 9/8/2021, 9/10/2021, BLS 9/10/2021. 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