This Weekly Financial Markets Update reviews the top market headlines: Retail Sales Unchanged in July, Fed Minutes Foreshadow Additional Rate Hikes, Housing Market Indicators Weaken Further

Top Three Market Headlines

Retail Sales Unchanged in July: The Department of Commerce reported last week that sales at retail and food service establishments were flat in July compared to the prior month. This was a decline from the 0.8% monthly pace recorded in June. Reported sales in July were suppressed by decreased spending at gasoline stations and car dealers, which fell 1.8% and 1.7%, respectively, from the prior month. Excluding these categories, sales at other establishments increased 0.7% from June. One of the biggest increases in July was seen in non-store retailers, or online shopping, where sales advanced 2.7%.

Fed Minutes Foreshadow Additional Rate Hikes: Minutes released last week of the Federal Reserve's latest meeting in July indicated that the central bank expects to keep raising interest rates to battle inflation. The meeting resulted in the Fed's fourth rate hike in 2022, including a second straight 0.75% increase to the bank's policy rate, the federal-funds rate. At the same time, Fed officials noted that it would likely become appropriate "at some point" to slow the pace of interest rate hikes, acknowledging the risk of overtightening economic conditions in attempting to restore price stability.

Housing Market Indicators Weaken Further: Data released last week revealed further weakening of the U.S. housing market amid rising mortgage rates. Sales of existing homes fell 5.9% in July from the prior month, and were down 20.2% from the prior year. This was the sixth straight month that sales fell, marking the longest such streak in eight years. Beyond the decline in sales, the number of housing starts fell 9.6% in July from June, while the number of building permits issued for new housing units, an indicator of future construction activity, also fell 1.3%.

As of August 22, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.60% 8.66% -13.27% -8.64%
S&P 500 -1.16% 11.95% -10.39% -2.58%
Russell 2000 -2.90% 14.77% -12.11% -7.08%
MSCI EAFE -2.19% 4.23% -16.17% -14.66%
MSCI Emerging Markets -1.48% 0.86% -16.91% -16.36%
FTSE NAREIT -2.23% 9.69% -12.47% -1.13%
Bloomberg Commodity -0.67% 4.84% 24.17% 33.99%
Barclays U.S. Aggregate -0.89% 0.73% -9.70% -10.53%

US Dept. of Commerce, 8/17/2022, Federal Reserve Bank of St. Louis 8/17/2022, WSJ 8/17/2022, WSJ 8/16/2022, 8/18/2022. 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.