This Weekly Financial Markets Update reviews the top market headlines: Inflation Rate Tops Estimates in March, Fed Minutes Reflect Caution on Rate Cuts, Optimism Ebbs for Small Business Owners
  • The Consumer Price Index rose 3.5% on an annual basin in March
  • The current target range for the federal funds rate is 5.25% to 5.50%
  • The NFIB Small Business Optimism Index fell to 88.5 in March

Top Three Market Headlines

Inflation Rate Tops Estimates in March: The Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.4% in March over the prior month, the same increase as February. This pushed the year-over-year rate of increase to 3.5% in March, which was above economists' expectations and up from a 3.2% pace in February. Product areas contributing to the accelerated annual rate in March included shelter (+5.7%), car insurance (+22%), and electricity (+5.0%). The "core" CPI, which excludes volatile food and energy items, also increased 0.4% on the month, or 3.8% versus the prior year, both unchanged from February

Fed Minutes Reflect Caution on Rate Cuts: Minutes were released last week from the latest Federal Reserve meeting held in March, at which officials maintained the current target range for the Fed's policy benchmark, the federal funds rate, of 5.25% to 5.50%. According to the minutes, meeting participants noted they did not expect to reduce the target range until "they had gained greater confidence that inflation was moving sustainably towards 2%." Further, some officials expressed concern that geopolitical risks could put additional upward pressure on prices.

Optimism Ebbs for Small Business Owners: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index fell to 88.5 in March, the lowest level since December 2012 and the 27th consecutive monthly reading below the 50-year average of 98. According to the latest report, inflation continues to be a top concern, with 25% of business owners surveyed citing it as the most important problem in operating their business, up two percentage points from last month. Another persistent issue is labor quality, identified by another 18% of owners as their primary operating problem.

As of April 15, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -2.23% -2.23% 5.78% 20.20%
S&P 500 -2.44% -2.44% 7.86% 27.19%
Russell 2000 -5.68% -5.68% -0.80% 14.71%
MSCI EAFE -2.45% -2.45% 3.20% 10.64%
MSCI Emerging Markets -0.06% -0.06% 2.30% 7.65%
FTSE NAREIT Equity -4.89% -4.89% -5.07% 6.04%
Bloomberg Commodity 3.68% 3.68% 5.95% 0.91%
Barclays U.S. Aggregate -1.75% -1.75% -2.52% -0.70%

U.S Bureau of Labor Statistics 4/10/24, Barron’s 4/10/2024, NFIB 4/09/2024, Federal Reserve 4/10/2024. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.