This Weekly Market Update reviews the top market headlines: NASDAQ Composite Index Ends Correction Territory, Jobless Claims Back on the Rise, German 10-year Bund Yield Briefly Turns Positive.
  • The NASDAQ Composite Index was fallen nearly 12% year-to-date
  • Jobless claims rose to 286,000 for the week ending January 15th
  • The German 10-year Bund benchmark yield turned positive for the first time since May 2019

Top Three Market Headlines

NASDAQ Composite Index Enters Correction Territory: The NASDAQ Composite Index, often used as a barometer of technology stocks given its high concentration in such companies, slipped into correction territory (a drop of 10% or more from recent highs) last week. From the start of the year through last Friday, the index has lost nearly 12% of its value. Roughly 71% of the stocks that comprise the NASDAQ are down at least 20% from their recent highs, with more than half of the index constituents down 40% or more. The decline has accompanied the recent jump in bond yields, which can dampen investor enthusiasm for companies with relatively expensive valuations.

Jobless Claims Back on the Rise: After hitting a post-pandemic low in early December, the number of Americans filing for unemployment benefits has begun rising again in 2022. The Bureau of Labor Statistics reported last week that the number of initial jobless claims was 286,000 for the week ending January 15th, well above expectations and the highest level since last October, while the number of continuing claims also rose. The recent uptrend comes amid business disruptions caused by the spread of the Omicron variant. With indications that the number of Omicron infections is peaking, however, economists are hopeful the number of jobless claims will resume their previous downward trend in upcoming weeks.

German 10-year Bund Yield Briefly Turns Positive: The yield on the German 10-year bund (government bond) briefly traded above zero last week for the first time since May 2019. The yield moved as high as 0.025% on Wednesday before falling back to -0.09% by week's end. The German bund is often viewed as a safe haven, and its negative yield has reflected global investors' willingness to pay a premium for holding the security. Global government bond yields and borrowing costs have been rising from historic lows during 2022 as investors weigh inflationary trends and future central bank actions.

As of January 18, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -4.24% -5.53% -5.53% 8.03%
S&P 500 -5.67% -7.66% -7.66% 15.76%
Russell 2000 -8.07% -11.44% -11.44% -6.24%
MSCI EAFE -2.08% -2.19% -2.19% 5.72%
MSCI Emerging Markets -1.04% 1.03% 1.03% -9.59%
FTSE NAREIT -3.89% -7.64% -7.64% 31.48%
Bloomberg Commodity 1.76% 6.25% 6.25% 31.28%
Barclays U.S. Aggregate 0.05% -1.77% -1.77% -2.53%

WSJ 1/20/22, WSJ 1/19/22, MarketWatch 1/19/22, Barron’s 1/19/22, FactSet 1/19/22, Reuters 1/20/22, Fox Business 1/20/22. 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.