This Weekly Market Update reviews the top market headlines: Business Activity Surveys Diverge in February, Solid Jobs Gains Reported for February, Commodities Rebound Accelerates.

Top Three Market Headlines

Business Activity Surveys Diverge in February: U.S. business activity expanded for the 21st straight month in February, according to surveys by the Institute for Supply Management (ISM). Notably, however, growth trends differed across the manufacturing and services sectors. Benefiting from continued strong demand, the ISM Manufacturing Index rose modestly to 58.6% in February (a reading above 50% indicates expansion of activity, while a sub-50% mark reflects contraction). On the other hand, the ISM Services index fell from 59.9% to 56.5%, its lowest level in 12 months, with survey respondents noting that supply chain constraints, rising costs, and labor shortages are pressuring growth rates.

Solid Jobs Gains Reported for February: The Labor Department reported last week that U.S. nonfarm payrolls grew by 678,000 in February, beating analysts' estimates. The number of job additions was the highest since July 2021, indicating that the pandemic's hold on the U.S. economy is weakening. Gains were broadly shared across various sectors, with the most new jobs—nearly a quarter of total additions—occurring in the leisure and hospitality sector. For the month, the jobless rate fell to 3.8% from 4.0% in February, while average hourly earnings increased 5.1% from the prior year.

Commodities Rebound Accelerates: The post-pandemic rebound in many commodities has picked up steam lately. Brent crude oil futures closed last week at $118 per barrel, their highest price since 2012, while the Bloomberg Industrial Metals index hit its highest level since 2008. Grain markets have particularly surged lately, with the price of wheat hitting all-time highs last week. Already benefiting from a supportive backdrop of rising demand and constrained supplies, certain commodity prices have seen a further boost in the aftermath of the Ukraine[1]Russia conflict, as Russia remains a critical exporter of energy products while both countries combined account for about 29% of global wheat exports.

As of March 7, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.35% -9.83% -9.83% 5.50%
S&P 500 0.98% -8.94% -8.94% 16.49%
Russell 2000 0.30% -10.74% -10.74% -5.84%
MSCI EAFE -3.41% -12.66% -12.66% -4.78%
MSCI Emerging Markets -0.84% -6.95% -6.95% -13.16%
FTSE NAREIT 3.83% -7.19% -7.19% 29.32%
Bloomberg Commodity 10.21% 28.15% 28.15% 49.94%
Barclays U.S. Aggregate 1.06% -3.09% -3.09% -1.79%

ISM 3/1/22; WSJ 3/4/22, Bloomberg 3/2/2022, WSJ 3/4/2022, CNBC 3/4/2022, Institute for Supply Management, 3/3/2022. 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