This Weekly Financial Markets Update reviews the top market headlines: Fed Chair Strikes Balanced Tone, Consumer Sentiment Stagnant in August, Existing Home Sales Fall Again in July

Top Three Market Headlines

Fed Chair Strikes Balanced Tone: In a highly-anticipated speech last week at an economic policy forum in Jackson Hole, WY, Federal Reserve Chair Jerome Powell emphasized that the central bank will proceed carefully in determining whether to orchestrate additional interest rate increases. The comments were interpreted by some market observers as a signal that the Fed is likely to hold rates steady for the time being after having raised the target federal-funds rate 11 times over the last 18 months. At the same time, Mr. Powell acknowledged that the economy has remained more resilient than officials expected and that there is "substantial further ground to cover" in order to bring inflation back to the bank's 2% target rate.

Consumer Sentiment Stagnant in August: After hitting a 21-month high in July, U.S. consumer sentiment retreated modestly in August. Published by the University of Michigan, the Index of Consumer Sentiment registered 69.5 in August, down 3% from 71.6 in July. While the August reading was 19% higher than a year ago and 39% above the index's all-time low recorded in June 2022, it remained below the index's 30-year average of 86.8. In a sign that consumers' concerns about inflation are lingering, the year-ahead inflation expectation of survey respondents edged up from 3.4% in July to 3.5% in August.

Existing Home Sales Fall Again in July: Sales of existing homes fell for the fourth time in five months in July, decreasing 2.2% from the prior month, according to a report last week from the National Association of Realtors. The seasonally-adjusted annualized rate (SAAR) of 4.07 million home sales was the slowest monthly sales pace since January of this year and was 16.6% below the level seen in July of last year. The weak sales trend reflects the effect of rising mortgage rates as well as a limited supply of homes for sale on the market.

As of August 28, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.54% -1.61% 12.10% 6.12%
S&P 500 0.84% -0.77% 15.99% 6.73%
Russell 2000 -0.29% -1.68% 6.27% -4.16%
MSCI EAFE -0.18% -3.41% 7.87% 11.26%
MSCI Emerging Markets 0.74% -1.27% 3.56% -0.64%
FTSE NAREIT Equity 0.78% -2.08% 3.18% -9.61%
Bloomberg Commodity 1.29% 4.80% -3.36% -11.02%
Bloomberg U.S. Aggregate 0.28% -1.64% 0.41% -2.98%

University of Michigan 8/25/2023, National Association of Realtors 8/22/2023, WSJ 8/25/2023. 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.