This Weekly Financial Markets Update reviews the top market headlines: Manufacturing Activity Contracts Again, Consumer Confidence Weakens, Home Prices Continue Retreating

Top Three Market Headlines

Manufacturing Activity Contracts Again: Business activity in the manufacturing sector slowed again in February, according to surveys of executives by the Institute for Supply Management (ISM). The ISM Manufacturing Index registered 47.7% on the month, up marginally from January's reading of 47.4% but still below the 50% threshold that distinguishes expansion of activity (>50%) from contraction. This was the fourth straight sub-50% reading for the manufacturing sector. In contrast, conditions in the services sector continued to improve, as the ISM Services Index, at 55.1%, surpassed 50% for the second consecutive month.

Consumer Confidence Weakens: U.S. consumers' outlook deteriorated for the second straight month in February, according to the latest Consumer Confidence Index report issued by the Conference Board, a private research group. The index fell from 106.0 in January to 102.9 in February, as consumers expressed more pessimism about jobs, income, and business conditions over the next six months. In addition, survey results indicated that consumers are scaling back plans to purchase large-ticket items like cars and appliances.

Home Prices Continue Retreating: With rising mortgage rates taking the steam out of the housing market, home prices continued cooling as 2022 came to a close. It was reported last week that the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index, which measures average home prices in major U.S. metropolitan areas, fell 0.5% in December from the prior month; this was the sixth straight month of declining prices. Compared to the prior year, the index was up only 4.6% in December, significantly less than the 20%+ pace of growth seen as recently as the spring of 2022.

As of March 6, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.91% 5.89% 5.89% -5.71%
S&P 500 1.96% 5.69% 5.69% -5.70%
Russell 2000 2.05% 9.70% 9.70% -3.73%
MSCI EAFE 1.81% 6.77% 6.77% 0.99%
MSCI Emerging Markets 1.68% 3.43% 3.43% -13.27%
FTSE NAREIT Equity 1.28% 6.90% 6.90% -12.26%
Bloomberg Commodity 2.71% -3.21% -3.21% -9.38%
Barclays U.S. Aggregate 0.12% 0.28% 0.28% -9.55%

Bloomberg 2/28/2023, ISM 3/3/2023. WSJ 02/28/2023, The Conference Board 02/28/2023. 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.