This Weekly Financial Markets Update reviews the top market headlines: More Housing Sector Softness, Downward Trend in Leading Economic Indicators Persists, Retail Sales Stem Recent Decline
  • Existing home sales fell 23% in April from the prior year
  • The Leading Economic Index fell by 0.6% in April, its 13th straight decline
  • U.S. retail sales increased 0.4% in April

Top Three Market Headlines

More Housing Sector Softness: Sales of existing homes declined for the second straight month in April, falling 3.4% from the prior month, according to the National Association of Realtors. Versus the prior year, April's seasonally-adjusted annualized rate (SAAR) of 4.28 million sales was 23% lower. Sales have now declined for 20 consecutive months on a year-over-year basis. Related, the U.S. Census Bureau reported last week that the SAAR of housing starts in April was 1.401 million, 22.3% lower than the prior year's pace. Fewer starts were seen across both single-family homes and apartments, down 28% and 12%, respectively, versus last year.

Downward Trend in Leading Economic Indicators Persists: The Conference Board announced last week that its Leading Economic Index (LEI), a composite of ten U.S. economic indicators intended to signal turning points in the economy, fell 0.6% in April from the prior month. This was the 13th consecutive monthly decline in the index. Of various index components, stock prices and manufacturers' new orders for both capital and consumer goods improved in April, but all other components declined. Based on trends in the index, The Conference Board forecasts that economic activity will contract starting in Q2 of this year.

Retail Sales Stem Recent Decline: U.S. retail sales rose 0.4% in April versus the prior month, according to data reported last week from the Department of Commerce. This was the first monthly increase after two consecutive months of declining sales. Product categories seeing increases in April included autos, restaurants, home improvement, and online purchases, while consumers cut spending on gasoline and big ticket purchases. Compared to April of last year, sales rose only 1.6% (including the effect of price increases), the slowest annual pace since May 2020.

Please note: There will be no Weekly Financial Market Update published next week. We would like to wish everyone a good Memorial Day holiday!

As of May 22, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.17% 1.84% 9.28% 7.92%
S&P 500 1.71% 2.24% 9.91% 9.34%
Russell 2000 1.93% -1.42% 1.27% 1.40%
MSCI EAFE 0.36% 2.66% 11.35% 11.93%
MSCI Emerging Markets 0.51% -0.97% 2.94% -0.79%
FTSE NAREIT Equity -2.10% -2.41% 0.20% -7.83%
Bloomberg Commodity -0.01% -3.54% -8.71% -19.99%
Bloomberg U.S. Aggregate -1.37% -1.05% 1.88% -2.10%

National Association of Realtors 5/18/2023, Conference Board 5/18/2023, WSJ 5/16/2023. 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.