This Weekly Market Update reviews the top market headlines: Business Surveys Signal Continued Expansion of Activity, Fed Signals Upcoming Actions, Auto Sales Constrained by Limited Inventories

Top Three Market Headlines

Business Surveys Signal Continued Expansion of Activity: Surveys of business executives conducted by the Institute for Supply Management (ISM) indicated that U.S. economic activity continued to expand in March in both the manufacturing and services sectors. The ISM Services Index rose to 58.3%, up from 56.5% in February, while the ISM Manufacturing Index registered 57.1%, down modestly from 58.6% in February. (A reading above 50% indicates expansion of activity, while a sub-50% mark reflects contraction.) This was the 22nd straight month that both indices exceeded 50%, though the latest readings indicate that the pace of expansion has decelerated from levels seen through most of 2021.

Fed Signals Upcoming Actions: Minutes released last week of the Federal Reserve's recent mid-March meeting indicated that the central bank could raise the federal-funds rate by a half-percentage point at its next meeting in May. The news comes on the heels of bank officials' approval at the same meeting of the first increase in the policy benchmark rate in more than three years to a range of 0.25%- 0.50%. In addition, the minutes revealed that the Fed could soon begin reducing its asset portfolio, which has swollen to $9 trillion amid the bank's aggressive monetary stimulus measures adopted in reaction to the pandemic.

Auto Sales Constrained by Limited Inventories: Sales of light vehicles in the U.S. registered a seasonally-adjusted annual rate (SAAR) of 13.3 million in March, according to the Bureau of Economic Analysis. This was the lowest SAAR in three months and well below the 17.6 million rate recorded in March of 2021. One of the main culprits continues to be a limited supply of autos, with dealership inventories constrained by on-going supply-chain disruptions. Demand, on the other hand, remains strong, with dealerships reporting stories of new models being sold immediately upon arrival. Reflecting the current trends, Toyota and General Motors recently reported first quarter sales declines of 15% and 20%, respectively.

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As of April 11, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.44% -1.29% -6.58% 2.92%
S&P 500 -1.24% -0.90% -5.46% 11.08%
Russell 2000 -4.60% -3.63% -10.88% -10.11%
MSCI EAFE -1.38% -1.85% -7.65% -3.14%
MSCI Emerging Markets -1.53% -1.18% -8.07% -14.19%
FTSE NAREIT -1.20% 0.79% -3.10% 24.52%
Bloomberg Commodity 2.06% 1.63% 27.59% 49.97%
Barclays U.S. Aggregate -1.82% -2.08% -7.89% -6.71%

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