This Weekly Financial Markets Update reviews the top market headlines: CPI Remains Steady in July, Small Business Confidence Rises Slightly, Credit Card Debt Hits a Record High

Top Three Market Headlines

CPI Remains Steady in July: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.2% in July from the prior month, the same pace that was reported in June. On a year-over-year basis, the CPI was up 3.2% in July, 0.2 percentage points greater than the 3.0% pace exhibited in June. The largest factor contributing to the monthly rise was the cost of shelter, while rapidly rising motor vehicle insurance prices also contributed. The index for food increased 0.2% on the month, while the energy index rose 0.1%. Excluding the volatile energy and food indices, the "core CPI" rose 4.7% in July over the prior year, the lowest rate since October 2021.

Small Business Confidence Rises Slightly: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index increased by 0.9 points in July to 91.9. While this was the highest mark in eight months, it remained below the index's 49-year average of 98. Survey findings included continued improvement in the percentage of small business owners expecting better future business conditions and those expecting sales to improve. Among other findings, 42% of owners reported difficulty filling jobs, unchanged from June, while 21% of owners continued to note that inflation was their top business concern, down three percentage points from the prior month.

Credit Card Debt Hits a Record High: Consumer credit card balances surpassed $1 trillion for the first time ever in the second quarter of 2023, according to a report issued last week by the Federal Reserve Bank of New York. Total credit card debt rose by 4.6% during the quarter to $1.03 trillion, which was 16.2% higher than the level recorded in the second quarter of last year. Meanwhile, more consumers are struggling to meet their payments, as the delinquency rate (loans 90 days or more delinquent) increased from 4.6% to 5.1% in the quarter. The latest figure is comparable to that recorded in Q1 of 2020 at the start of the pandemic, but is up notably from a post-pandemic low of 3.0% in Q1 of 2022.

As of August 14, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.58% 0.44% 14.43% 7.15%
S&P 500 -0.27% 0.46% 17.43% 7.92%
Russell 2000 -1.62% 2.04% 10.29% -1.01%
MSCI EAFE -0.56% 0.07% 11.75% 11.21%
MSCI Emerging Markets -1.94% 1.34% 6.29% 1.18%
FTSE NAREIT Equity 0.34% 0.39% 5.78% -9.10%
Bloomberg Commodity -0.22% 4.69% -3.46% -10.65%
Bloomberg U.S. Aggregate -0.64% -1.42% 0.64% -3.56%

U.S. Bureau of Labor 8/10/2023, NFIB 8/8/2023, Federal Reserve Bank of New York 8/8/2023, Reuters 8/8/2023. 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.