This Weekly Financial Markets Update reviews the top market headlines: Bank Fears Rattle Markets, Fed Chair Sends Hawkish Message on Rates, Job Gain Again Exceed Expectations
  • The SPDR S&P Regional Banking ETF declined 16.0% last week
  • The current federal-funds rate target range stands at 4.50% - 4.75%
  • U.S. employers added 311,000 jobs in February

Top Three Market Headlines

Bank Fears Rattle Markets: U.S. stocks tumbled late last week as investors reacted to the sudden collapse of Silicon Valley Bank (SVP), the 16th largest U.S. bank by assets. News that the bank, which catered to technology start-up companies, sought to raise capital to offset sizable losses on its securities portfolio sparked a classic "bank run" by depositors. Regulators stepped in and closed the institution on Friday, leaving some depositors stranded and sparking concerns about similar risks potentially facing other banks. On the week, the SPDR S&P Regional Banking ETF plunged 16.0%, while the broader S&P 500 index lost 4.5%.

Fed Chair Sends Hawkish Message on Rates: In testimony to Congress last week, Federal Reserve Chairman Jerome Powell stated the central bank would explore reaccelerating interest rate increases when it meets later this month. In early February, Fed officials dialed back the pace of rate hikes, raising the target range for the benchmark federal-funds rate by 0.25%, the smallest move since March 2022. Over the last month, however, certain economic data have been stronger than expected, including job growth, retail sales, and inflation, causing the Fed to reconsider adopting a more aggressive stance in its on-going effort to tame inflation.

Job Gains Again Exceed Expectations: The Labor Department reported last week that employers added 311,000 jobs in February, outpacing expectations for the second straight month. As in the prior month, notable gains in February were seen in the leisure & hospitality sector, along with healthcare. Conversely, the manufacturing and transportation sectors reported employment declines. Notwithstanding the healthy number of job additions, investors gleaned hints of softness in the report: the unemployment rate rose to 3.6% from 3.4%, while wage gains moderated to a 0.2% monthly growth rate, the lowest amount in 12 months.

As of March 13, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -3.6% 2.1% 2.1% -6.5%
S&P 500 -4.5% 0.9% 0.9% -7.8%
Russell 2000 -8.0% 0.9% 0.9% -10.6%
MSCI EAFE -0.8% 6.0% 6.0% 2.7%
MSCI Emerging Markets -3.3% 0.0% 0.0% -10.9%
FTSE NAREIT Equity -7.4% -1.0% -1.0% -18.9%
Bloomberg Commodity -3.4% -6.5% -6.5% -14.0%
Barclays U.S. Aggregate 1.2% 1.5% 1.5% -7.4%

WSJ 3/7/2023, 3/10/2023, 3/12/2023, NY Post 3/10/2023, U.S. Dept. of Labor 3/10/2023. Data from Morningstar Direct and FactSet. 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.