This Weekly Financial Markets Update reviews the top market headlines: Core CPI Jumps to a Four-Decade High, Retail Sales Flat in September, Small Business Optimism Remains Modest
  • The core CPI jumped 6.6% on an annual basis in September
  • Retail sales growth in September was 0.0%
  • The U.S. Small Business Optimism index rose to 92.1 in September from 91.8 in August

Top Three Market Headlines

Core CPI Jumps to a Four-Decade High: The U.S. Department of Labor reported last week that the Consumer Price Index rose 0.4% in September over the prior month, an accelerated pace from the 0.1% monthly increase recorded in August. On an annual (year-over-year) basis, the index rose 8.2%, little changed from last month's 8.3% reading. While gasoline prices were lower in September, prices for food, shelter, and medical care continued to escalate; the food component of the index, in fact, jumped 11.2% in September versus the prior year. The core CPI, which excludes energy and food prices, rose 0.6% on the month and 6.6% over the prior year, the latter representing a four-decade high.

Retail Sales Flat in September: Sales at retail and food establishments were flat in September versus August, after having increased at a 0.4% pace in the prior month. Multiple kinds of stores posted drops, including gasoline stations, car dealers, furniture & home furnishing stores, and electronics & appliance stores. On the other hand, general merchandise stores (department stores), online businesses, clothing stores, and bars & restaurants saw gains. On an annual (year-over-year) basis, retail sales through September were up 8.2%, which largely reflects the effect of prices rising at a rapid clip over this period, as noted above.

Small Business Optimism Remains Modest: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index rose slightly in September to 92.1 from 91.8 in August. This marked the ninth straight monthly reading below the index's 48-year average of 98.0. The September report noted that 30% of small business owners recognized inflation as the principal concern for business operations, up modestly from the prior month. Worker shortages also remained a challenge, with 46% of business owners reporting that job openings couldn't be filled.

As of October 17, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.93% -0.19% -25.77% -22.71%
S&P 500 -1.53% 0.00% -23.87% -18.01%
Russell 2000 -1.15% 1.10% -24.28% -25.05%
MSCI EAFE -1.35% 0.57% -26.68% -25.38%
MSCI Emerging Markets -3.81% -1.39% -28.17% -29.90%
FTSE NAREIT -1.00% -3.91% -30.94% -23.78%
Bloomberg Commodity -2.90% 2.09% 15.94% 10.14%
Barclays U.S. Aggregate -1.19% -1.44% -15.84% -15.90%

NFIB 10/11/2022, Commerce Department 10/14/2022, US Dept. of Labor, 10/13/2022, WSJ 10/14/2022, WSJ 10/13/2022. 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.