This Weekly Market Update reviews the top market headlines: Consumer Inflation Decelerates for the Second Straight Month, Retail Sales Surprise in August, Supply Chain Woes Drive Soaring Shipping Costs

Top Three Market Headlines

Consumer Inflation Decelerates for the Second Straight Month: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.3% in August from the prior month, the lowest monthly rate since January. Meanwhile, the "core" CPI, which excludes the volatile food and energy categories, rose only 0.1% on the month. Both rates have decelerated from recent highs of 0.9% in June. Indexes remained elevated compared to a year ago, however; the CPI increased at a 5.3% annual pace while the core rate rose 4.0%. The deceleration of price increases in August was partly attributed to easing prices for autos, hotel rates, and airline fares.

Retail Sales Surprise in August: Sales at retail establishments rose in August, according to the U.S. Department of Commerce. Data showed that sales at online retailers, restaurants, and brick-and-mortar stores increased 0.7% from the prior month, partly offsetting a sharp 1.8% decline in July. The largest gain in August was registered by internet retailers, while the biggest drop came from auto sales as automakers struggle to keep pace with demand due to the global shortage of microchips. Overall, the positive result was a surprise to economists and analysts, who had predicted a widespread drop in sales.

Supply Chain Woes Drive Soaring Shipping Costs: The on-going supply chain crunch triggered by Covid-19-related factory shutdowns has caused global shipping prices to soar, as companies seeking to restock inventories are forced into bidding wars to access space on shipping vessels. According to the Freightos Baltic Index, the cost of a transporting a 40-foot container has risen more than five-fold over the last 12 months. Some companies, including Molson Coors and Mondelez Global, have recently warned that rising transportation costs are driving higher cost inflation, and some, like Procter & Gamble and Michelin, have announced price increases this year driven partly by higher freight costs.

As of September 20, 2021 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.97% 1.72% 14.23% 29.97%
S&P 500 -0.54% 3.48% 19.26% 34.04%
Russell 2000 0.45% -3.00% 14.01% 46.48%
MSCI EAFE -1.38% 2.31% 11.34% 25.68%
MSCI Emerging Markets -2.20% -6.31% 0.67% 17.89%
FTSE NAREIT -2.24% 4.08% 26.93% 36.69%
Bloomberg Commodity 0.46% 3.19% 25.01% 34.83%
Barclays U.S. Aggregate -0.03% 0.85% -0.77% -0.32%

MarketWatch 9/16/2021, WSJ 9/14/20201, 9/16/2021, Bloomberg 9/16/2021, Freightos 9/17/2021. 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.