This Weekly Financial Markets Update reviews the top market headlines: Stubborn Inflation Trends in February, Mixed February Retail Sales Report, Inflation Weighs on Small Business Owners
  • The Consumer Price Index rose 3.2% on an annual basis in February
  • U.S. retail sales rose 0.6% in February after falling 1.1% in January
  • The NFIB Small Business Optimism Index fell to 89.4 in February

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Top Three Market Headlines

Stubborn Inflation Trends in February: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.4% in February over the prior month, up from January's 0.3% monthly pace. Key areas contributing to the higher reading included shelter (+0.4%) and gasoline (+3.8%), which together drove over 60% of the index's rise in February. Compared to the prior year the CPI increased 3.2%, also a modest increase from 3.1% in January. The "core" CPI, which excludes volatile food and energy items, rose 0.4% on the month, unchanged from January, while registering 3.8% on an annual basis, down marginally from 3.9% in January.

Mixed February Retail Sales Report: The U.S. Census Bureau reported last week that sales at U.S. retail and food service establishments rebounded at a 0.6% monthly pace in February after falling in January. However, the result fell short of economists' expectations for a 0.8% gain, and the previously-reported January decline was revised down to 1.1% from 0.8%. On a year-over-year basis, the rate of sales growth in February, including the effect of price increases, was just 1.5%. On a monthly basis, the strongest results were seen in building materials & garden equipment (+2.2%) and motor vehicles & parts (+1.6%), while sales faltered across furniture (-1.1%), clothing (-0.5%), and internet (-0.1%) retailers.

Inflation Weighs on Small Business Owners: Small business owners continued facing challenging conditions in February, according to the latest Small Business Optimism Index. Released last week by the National Federation of Independent Business, the index fell from 89.9 in the prior month to 89.4 in February, its lowest level in nine months and its 26th straight month below the 50-year average of 98. The report highlighted that inflation remained the most important concern facing business operators, followed by labor quality and labor costs.

As of March 18, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.43% 5.88% 5.88% 27.60%
S&P 500 -0.09% 7.63% 7.63% 33.59%
Russell 2000 -2.02% 0.89% 0.89% 18.65%
MSCI EAFE -1.32% 4.38% 4.38% 21.31%
MSCI Emerging Markets -0.12% 1.38% 1.38% 12.23%
FTSE NAREIT Equity 2.80% -2.69% -2.69% 9.74%
Bloomberg Commodity 1.31% 1.69% 1.69% 2.42%
Barclays U.S. Aggregate -1.23% -1.72% -1.72% 1.15%

US Bureau of Labor Statistics 3/12/2024, WSJ 3/14/2024, US Dept. of Commerce 3/14/2024, NFIB 3/12/2024. 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.