This Weekly Market Update reviews the top market headlines: Commodity Index Sees Best Return in 32 Years, Jobs Recovery Continues, Key Yield Curve Relationship Inverts

Top Three Market Headlines

Commodity Index Sees Best Return in 32 Years: A benchmark measuring the prices of commodities futures contracts, the S&P GSCI index, recorded a 29% gain during the first quarter of 2022, its best quarterly result since 1990. Recent gains have been widespread across many commodities, including energy, metals, and agricultural products such as wheat and corn. The latest gains add to an ongoing rally in many commodities that was rooted in the reopening of the economy after the Covid-19 pandemic, and that has received an additional push lately after Russia's invasion of Ukraine, which has raised concerns about the availability of supplies of various products.

Jobs Recovery Continues: The Labor Department reported last week that U.S. nonfarm payrolls grew by 431,000 in March. While this number fell short of economists' expectations, the unemployment rate dropped to 3.6%, the lowest since February 2020. The leisure and hospitality industry added the most jobs in March, followed by professional and business services. Several industry sectors reached or surpassed their February 2020 employment levels, including transportation and warehousing, retail, finance, and professional and business services. For the month, average hourly earnings increased by 5.6% from the prior year, underlining the tightness of the labor market.

Key Yield Curve Relationship Inverts: Yields on 2-year Treasury bonds ended last week higher than those available on 10-year Treasury bonds, an infrequent occurrence known as an inverted yield curve. (The yield curve depicts yields offered in the market for Treasury bonds of different maturities.) Typically, longer[1]dated Treasuries offer higher yields; however, at week's end, the 2-year Treasury yielded 2.43%, versus 2.38% for the 10-year Treasury. Observers watch this relationship closely, as economic recessions historically have been preceded by an inverted yield curve; however, there have also been occasions when an inverted curve gave a "false signal" and did not presage a recession.

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As of April 04, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.51% 0.16% -5.21% 6.31%
S&P 500 0.08% 0.34% -4.27% 14.68%
Russell 2000 0.68% 1.02% -6.58% -6.24%
MSCI EAFE 0.78% -0.48% -6.36% 0.17%
MSCI Emerging Markets 1.91% 0.36% -6.64% -0.17%
FTSE NAREIT 3.94% 2.02% -1.92% 26.45%
Bloomberg Commodity -4.59% -0.43% 25.01% 47.93%
Barclays U.S. Aggregate 0.75% -0.27% -6.19% -4.72%

WSJ 3/31/2022, BLS 4/1/2022, CNBC 4/1/2022, FactSet. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Gallagher Fiduciary Advisors, LLC (“GFA”) is an SEC Registered Investment Adviser that provides retirement, investment advisory, discretionary/named and independent fiduciary services. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of AJG or its affiliates or to independent contractors; such payments do not change our fee. Securities may be offered through Triad Advisors, LLC (“Triad”), member FINRA/SIPC. Triad is separately owned and other entities and/or marketing names, products or services referenced here are independent of Triad. Neither Triad, Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice