This Weekly Financial Markets Update reviews the top market headlines: Inflation Decelerates Modestly in June, U.S. Jobless Claims Rise to a Nine-Month High, Small Business Optimism Remains Subdued

Top Three Market Headlines

Inflation Decelerates Modestly in June: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) was unchanged in July compared with the prior month. On an annual basis inflation remained elevated, with the CPI up 8.5% over last year, although this was down slightly from the 9.1% annual pace in June. The "core" CPI, which excludes volatile energy and food prices, recorded a 0.3% increase on the month and 5.9% on an annual basis. Keying the deceleration in the headline CPI in July was falling energy prices, along with decreases in used car prices and airfares. On the other hand, food prices increased 1.3% in July and were up 13.1% on an annual basis.

U.S. Jobless Claims Rise to a Nine-Month High: Applications for unemployment benefits rose to their highest level since last November in the week ended August 6th. According to data from the U.S. Department of Labor, initial unemployment claims, a proxy for layoffs, increased by 14,000 to 262,000 for the week. Weekly claims have been rising steadily since reaching a 50-year low of 166,000 in mid-March, signaling that labor market conditions might be softening despite the stronger — than-expected July jobs report that was released in the prior week.

Small Business Optimism Remains Subdued: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index rose marginally in July to 89.9 from 89.5. This was the first monthly increase since December of last year; however, the index remains short of its 48-year average of 98 and well below the recent cycle high of 102.5 seen in mid-2020. About 37% of business owners reported that inflation is the biggest issue they face, the highest level since 1979. Quality of labor was listed as business owners' second-highest concern behind inflation.

As of August 15, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.90% 10.42% -11.86% -8.99%
S&P 500 3.31% 13.27% -9.34% -2.61%
Russell 2000 4.97% 18.21% -9.48% -9.03%
MSCI EAFE 2.16% 6.56% -14.29% -14.66%
MSCI Emerging Markets 1.65% 2.37% -15.67% -18.88%
FTSE NAREIT 4.99% 12.19% -10.47% 0.86%
Bloomberg Commodity 4.59% 5.54% 25.00% 30.55%
Barclays U.S. Aggregate 0.24% 1.63% -8.89% -9.23%

NFIB 8/10/2022, WSJ 8/10/2022, U.S. Bureau of Labor Statistics 8/10/2022, WSJ 8/11/2022. 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.