This Weekly Financial Markets Update reviews the top market headlines: Inflation Moderates in December, Small Business Optimism Wanes in December, U.S. Container Imports Fall to Pre-Pandemic Levels
  • The U.S. Consumer Price Index rose 6.5% in December versus the prior year
  • The NFIB Small Business Optimism fell to 89.8 in December
  • U.S. container imports fell almost 20% in December versus the prior year

Top Three Market Headlines

Inflation Moderates in December: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) decreased by 0.1% in December from the prior month. Compared to the prior year, prices were up 6.5%, a deceleration from November's 7.1% annual pace and down from a recent-cycle high of 9.1% in June of last year. Energy was the largest factor driving the decrease in December, while items such as used cars and furniture have seen price moderation as well. The "core" CPI, which excludes the volatile food and energy categories, showed a monthly increase of 0.3% and an annual rate of 5.7%, down from 6.0% in November.

Small Business Optimism Wanes in December: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index declined 2.1 points in December to 89.8. This was the 12th consecutive monthly reading below the index's 49-year average of 98. Inflation remains a pressing concern for small business owners, with 32% reporting it as the most significant problem in operating their business. Labor availability also remains problematic, with 93% of respondents who were hiring or trying to hire in December reporting few or no qualified applicants for open positions.

U.S. Container Imports Fall to Pre-Pandemic Levels: According to Descartes Datamyne, a trade intelligence database, American ports processed just over 1.9 million inbound containers in December. This was down nearly 20% from December of 2021 and the lowest monthly total since June 2020. Ocean imports to the U.S. have fallen steadily over the last six months, reversing the post-COVID surge experienced in 2021 and the first half of 2022 as retailers attempted to restock depleted inventories. With the latest decline, import volume in December approached pre-Covid levels seen in December 2019.

As of January 17, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.62% 5.44% 5.44% -13.01%
S&P 500 2.71% 4.22% 4.22% -12.74%
Russell 2000 5.27% 7.17% 7.17% -11.35%
MSCI EAFE 2.50% 7.04% 7.04% -9.36%
MSCI Emerging Markets 1.73% 7.71% 7.71% -16.08%
FTSE NAREIT Equity 4.21% 5.99% 5.99% -17.19%
Bloomberg Commodity 3.30% 0.92% 0.92% 10.70%
Barclays U.S. Aggregate 0.88% 2.74% 2.74% -9.44%

WSJ 1/10/2023, NFIB 1/10/2023, CNN 1/12/2022, U.S. Department of Labor 1/12/2022. 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.