This Weekly Financial Markets Update reviews the top market headlines: Another Challenging Quarter for Financial Assets, Home Price Growth Abated in July, Consumers’ Outlook Improves Modestly

Top Three Market Headlines

Another Challenging Quarter for Financial Assets: The third quarter of 2022 proved to be another challenging period for financial assets, with many broad indices extending first-half losses. Brief rallies across stocks and bonds in July fizzled amid slowing economic growth, persistently high inflation, and an aggressive rate-hiking posture by the Federal Reserve. Most U.S. stock market indices posted their third straight quarterly loss (S&P 500 index, -4.9%), while international stocks fared even worse (MSCI EAFE index, -9.3%, U.S.-$ terms). Bonds, meanwhile, struggled as market yields rose throughout the quarter (Bloomberg Barclays U.S. Aggregate index, -4.8%). (All returns quoted on a total return basis.)

Home Price Growth Abated in July: U.S. home prices across broad metropolitan areas fell in July for the first time since March of 2019, as the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index declined 0.4% from June. Prices were still 16.1% higher compared to the prior year, though this represented a deceleration from the 18.6% annual increase in the previous month. The changing trend underscored a cooling in the housing market as mortgage rates continue to climb. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage in the U.S. hit 6.7% last week, more than double from a year ago.

Consumers' Outlook Improves Modestly: Recent declines in gas prices have modestly improved the outlook of consumers, according to a pair of surveys released last week. The Conference Board Consumer Confidence Index rose in September for the second straight month, clocking 108.0 versus 103.6 in August. Meanwhile, the Index of Consumer Sentiment published by the University of Michigan rose to 58.6 in September, up marginally from 58.2 in August. While survey results improved in September versus the prior month, both measures remain well below mid-2021 levels.

As of October 03, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -2.48% -6.82% -25.63% -20.66%
S&P 500 -2.88% -4.88% -23.87% -15.47%
Russell 2000 -0.82% -2.19% -25.10% -23.50%
MSCI EAFE -1.35% -9.36% -27.09% -25.13%
MSCI Emerging Markets -3.26% -11.57% -27.16% -28.11%
FTSE NAREIT -3.65% -9.94% -28.13% -16.41%
Bloomberg Commodity -0.75% -4.11% 13.57% 11.80%
Barclays U.S. Aggregate -0.99% -4.75% -14.61% -14.60%

WSJ 9/30/2022, Morningstar 9/30/2022, S&P Dow Jones 9/27/2022, Univ. of Michigan Surveys of Consumers 09/30/2022, The Conference Board, 9/27/2022, Freddie Mac 9/29/2022. 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.