This Weekly Financial Markets Update reviews the top market headlines: Inflation Eases Modestly but Remains Elevated, Corporate Earnings Growth Slows in the Third Quarter, Bitcoin Tumbles as Crypto Exchange Goes Under
  • The U.S. Consumer Price Index rose 7.7% in October versus the prior year
  • Earnings for S&P 500 constituents have grown by 2.2% in Q3
  • The price of Bitcoin has fallen nearly 75% from its all-time high a year ago

Top Three Market Headlines

Inflation Eases Modestly but Remains Elevated: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose by 0.4% in October from the prior month, unchanged from the rate of increase seen in September. Compared to the prior year, prices were up 7.7%, a slight deceleration from September's 8.2% annual pace. Higher shelter costs accounted for more than half of the monthly CPI increase in October, while food and energy costs also continued to rise. The "core" CPI, which excludes the volatile food and energy categories, showed monthly and annual increases of 0.3% and 7.7%, respectively, both down slightly from September. Declining prices for used motor vehicles, medical care, apparel, and airline fares helped ease pressure on the core index.

Corporate Earnings Growth Slows in the Third Quarter: Companies in the S&P 500 have collectively reported a year-over-year earnings growth rate of 2.2% for the third quarter of 2022, according to data published last week by FactSet. With 91% of S&P 500 companies having reported earnings to date, the 2.2% rate represents a drop from the previous quarter's 7.5% pace and is the lowest growth reported since the third quarter of 2020. Seven of 11 sectors have reported negative earnings growth in the third quarter; of the four sectors posting positive growth, the largest gains have come in the energy sector, where earnings are up nearly 140% from last year.

Bitcoin Tumbles as Crypto Exchange Goes Under: The price of Bitcoin came under renewed pressure last week, tumbling below $16,000 mid-week before closing at $16,773 on Friday, down 20% on the week. The digital currency has fallen approximately 65% since the start of the year and nearly 75% from its all-time high a year ago. The latest slide came amid turmoil in the cryptocurrency markets as exchange company FTX, which lists various crypto tokens, faced a liquidity squeeze before eventually filing for bankruptcy at the end of the week, stranding some customers' deposits.

As of November 14, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 6.59% 11.93% -16.75% -16.31%
S&P 500 5.93% 11.55% -15.08% -12.76%
Russell 2000 4.64% 13.23% -15.19% -20.80%
MSCI EAFE 8.42% 15.59% -15.73% -16.27%
MSCI Emerging Markets 5.74% 6.93% -22.11% -24.90%
FTSE NAREIT 5.62% 9.11% -21.58% -16.80%
Bloomberg Commodity -0.44% 5.30% 19.59% 14.78%
Barclays U.S. Aggregate 2.29% 0.59% -14.10% -14.11%

Sources: US Dept. of Labor 11/10/2022, FactSet 11/10/2022, WSJ 11/11/2022. 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.