This Weekly Financial Markets Update reviews the top market headlines: Treasury Bond Yields Hit Multi-Year Highs, Hiring Picks Up in September, Business Surveys Reinforce Divergent Conditions
  • The 10-year Treasury bond yield hit 4.8% last week, a 16-year high
  • U.S. non-farm payrolls rose by 336,000 in September
  • The ISM Manufacturing Index registered 49.0% in September

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Top Three Market Headlines

Treasury Bond Yields Hit Multi-Year Highs: U.S. Treasury bond yields continued to press higher last week, with those on intermediate- and long-term issues hitting fresh multi-year highs. The bellwether 10-year Treasury bond yield touched 4.8% mid-week, the highest level in more than 16 years, while the 30-year Treasury bond briefly pierced 5.0% during the week, also a 16-year high. Yields on both have risen more than 1.5 percentage points since early April, as investors have reacted to stronger-than-expected economic growth and the Federal Reserve's "higher for longer" interest rate policy, among other factors.

Hiring Picks Up in September: The Labor Department reported last week that employers in the U.S. added 336,000 jobs in September, which surpassed expectations and was the largest monthly gain since January. At the same time, the previously-reported estimated gains for July and August were revised upwards by a combined 119,000. According to the report, industries seeing the most job additions in September were leisure & hospitality and government. Meanwhile, the unemployment rate held steady at 3.8% compared to August, while average hourly wages rose at a 4.2% annual rate, down marginally from a July's 4.3% pace.

Business Surveys Reinforce Divergent Conditions: The U.S. manufacturing and services sectors continue to point in different directions, according to surveys of executives conducted by the Institute for Supply Management (ISM). The ISM Manufacturing Index recorded 49.0% for the month of September, its 11th consecutive month below the 50% threshold that differentiates expansion of activity from contraction. Conversely, activity in the services sector continued to expand, as the ISM Services Index registered 53.6% for September, exceeding 50% for the ninth straight month.

As of October 09, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.40% -0.40% 9.61% 15.47%
S&P 500 -0.52% -0.52% 13.66% 17.01%
Russell 2000 -2.19% -2.19% 0.29% 1.19%
MSCI EAFE -1.85% -1.85% 5.10% 19.24%
MSCI Emerging Markets -1.61% -1.61% 0.18% 5.69%
FTSE NAREIT Equity -1.82% -1.82% -3.92% 1.84%
Bloomberg Commodity -2.06% -2.06% -5.43% -7.72%
Bloomberg U.S. Aggregate -1.17% -1.17% -2.36% -0.73%

ISM 10/2/2023 & 10/4/2023, US Dept. of Labor, 10/6/2023, WSJ 10/6/2023. FactSet. 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.