This Weekly Financial Markets Update reviews the top market headlines: Inflation Decelerates in June, Consumer Credit Growth Slows, Small Business Confidence Improves Modestly

Top Three Market Headlines

Inflation Decelerates in June: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.2% in June from the prior month and was up 3.0% on an annual basis. The yearly increase was down from an annual pace of 4.0% in May and was the lowest rate since March 2021. Significant contributors to the index's rise over the prior year were motor vehicle insurance and shelter, while energy, airline fares, technology products, and used vehicles were among categories where prices decreased. Excluding the volatile energy and food sectors, "core CPI" rose 4.8% versus the prior year, down from a 5.3% pace in May.

Consumer Credit Growth Slows: The Federal Reserve reported last week that growth in consumer credit (most credit extended to individuals, excluding real estate) increased by $7.2 billion in May, well below estimates for a $20 billion increase. This translated to a seasonally adjusted annual rate of 1.8% compared to a 5% pace in the prior month and marked the lowest monthly increase in consumer borrowing since November 2020. Revolving debt, mostly representing credit cards, increased by 8.2%, a decrease from the 13.8% rise the prior month. Non-revolving debt associated with student loans and auto loans declined by 0.4% after growing by 2.1% the prior month, the first decline since April 2020.

Small Business Confidence Improves Modestly: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index increased by 1.6 points in June to 91.0. While this was a seven-month high, it remained well below the index's 49-year average of 98. Survey results indicated improvement in the percentage of small business owners expecting better future business conditions and those expecting sales to improve. While owners continued to note that inflation remained one of their top business concerns, the net percent of owners increasing prices in June fell to 29%, the lowest level since March 2021.

As of July 17, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 3.40% 2.03% 16.25% 20.36%
S&P 500 2.44% 1.30% 18.41% 20.91%
Russell 2000 3.58% 2.28% 10.55% 14.85%
MSCI EAFE 4.87% 2.73% 14.71% 26.16%
MSCI Emerging Markets 4.95% 4.28% 9.38% 9.61%
FTSE NAREIT Equity 3.09% 3.25% 8.79% 4.56%
Bloomberg Commodity 2.74% 3.28% -4.76% -2.26%
Bloomberg U.S. Aggregate 1.51% 0.20% 2.29% -1.03%

U.S. Bureau of Labor Statistics 7/12/2023, Federal Reserve 7/10/2023, MarketWatch 7/10/2023, Reuters 7/11/2023, NFIB 7/11/2023. 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.