This Weekly Financial Markets Update reviews the top market headlines: U.S. GDP Growth Cools in Q1, More Evidence of Stubborn Inflatoin, Treasury Bond Yields Hit New 2024 Highs
  • U.S. GDP growth slowed to a 1.6% seasonally-adjusted annual rate in Q1 2024
  • The core Personal Consumer Expenditures price index increased 2.8% versus the prior year in March
  • The 10-year Treasury bond yield touched 4.7% last week

Top Three Market Headlines

U.S. GDP Growth Cools in Q1: The Bureau of Economic Analysis reported last week that real (inflation-adjusted) U.S. gross domestic product (GDP), a measure of all goods and services produced, grew in the calendar quarter ended March 31, 2024 at an annualized rate of 1.6%. This lagged economists' projection of 2.4% and was down from a 3.4% pace in Q4 of 2023. Categories driving growth in Q1 included residential and nonresidential fixed investment and consumer spending on services (health care, financial services, insurance). Offsets included a material downshift in government spending and a decrease in business inventories.

More Evidence of Stubborn Inflation: The latest reading of the Personal Consumption Expenditures (PCE) price index, released last week by The Bureau of Economic Analysis, showed that prices for consumer goods and services on a "core" basis (excluding food and energy) increased 2.8% year-over-year in March, unchanged from February's pace. Through the first quarter 2024, the measure, reported to be the Federal Reserve's preferred inflation gauge, rose at an annualized pace of 4.4%. The release reinforced the trend depicted by the Consumer Price Index, issued separately by the Department of Labor, of inflation stalling at a pace above the Fed's 2% target.

Treasury Bond Yields Hit New 2024 Highs: Yields on benchmark U.S. Treasury bonds of various maturities hit new year-to-date highs last week, extending the trend of rising yields in 2024. The 2-year Treasury note yield settled on Friday just shy of 5.0% and the bellwether 10-year Treasury yield briefly topped 4.7% during the week, while further out the yield curve the 30-year Treasury yield ended the week at 4.8%. All three have increased more than three-quarters of a percentage point in 2024 as investors have reassessed expectations for Federal Reserve rate cuts amid higher-than-expected inflation readings.

As of April 29, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.62% -2.58% 5.40% 20.63%
S&P 500 2.68% -2.87% 7.38% 27.71%
Russell 2000 2.80% -5.72% -0.84% 17.50%
MSCI EAFE 1.92% -2.85% 2.77% 9.45%
MSCI Emerging Markets 3.77% -0.01% 2.36% 10.52%
FTSE NAREIT Equity 1.38% -6.46% -6.46% 6.22%
Bloomberg Commodity -0.03% 3.89% 6.17% 4.98%%
Barclays U.S. Aggregate -0.08% -2.43% -3.19% -1.25%

Bureau of Economic Analysis 4/25/2024, 4/26/2024, WSJ 04/26/2024, Fox Business 4/25/2024, FactSet. 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.