This Weekly Financial Markets Update reviews the top market headlines: Headline Inflation Ticks Higher in November, Small Business Optimism Jumps in November, ECB Cuts Policy Rate Again
  • The core CPI rose at a 3.3% annual rate in November
  • The NFIB Small Business Optimism index rose to 101.7 in November
  • ECB Lowers interest rate to 3% from 3.25%

Top Three Market Headlines

Headline Inflation Ticks Higher in November: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.3% in November from the prior month, a slightly faster pace than the 0.2% increase posted in each of the previous four months. On a year-over-year basis the CPI was up 2.7%, the fastest rate in four months. Key factors driving the index higher in November included shelter and food, up 0.3% and 0.4%, respectively, on a monthly basis. The "core" CPI, which excludes food and energy items, rose 0.3% in November and 3.3% on a year-over year basis, both unchanged from October.

Small Business Optimism Jumps in November: The National Federation of Independent Business (NFIB) Small Business Optimism Index increased by eight points in November to 101.7. This marked the highest reading since June 2021 and was the first time in 34 months the index exceeded the 50-year average of 98. Among the survey's key findings, the net percent of business owners expecting the economy to improve hit the highest level since June 2020. Similar to prior months, inflation and labor quality remained the most important problems cited by owners in operating their business.

ECB Cuts Policy Rate Again: The European Central Bank (ECB) last week agreed to cut the deposit facility rate, a key policy interest rate that impacts borrowing costs across the eurozone, to 3.0% from 3.25%. This was the fourth quarter-point rate cut enacted this year by the ECB in response to soft economic growth and moderating inflation. The decision came on the heels of the Swiss Central Bank surprising investors with a 0.5% cut in its policy rate as well. European officials have eased interest rates this year at a swifter pace than those in the U.S., where economic growth has been stronger, and inflation remains above the Federal Reserve's 2.0% target.

As of December 13, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.84% 1.88% 20.90% 24.01%
S&P 500 -0.61% 5.30% 28.55% 30.36%
Russell 2000 -2.55% 5.49% 17.27% 22.20%
MSCI EAFE -1.52% -5.83% 6.41% 10.80%
MSCI Emerging Markets 0.25% -5.38% 10.57% 16.47%
FTSE NAREIT Equity -1.52% -2.71% 12.79% 15.48%
Bloomberg Commodity 1.31% -0.75% 5.06% 7.76%
Bloomberg U.S. Aggregate -1.38% -2.37% 1.97% 3.27%

US Dept of Labor, 12/11/2024, NFIB 12/10/2024, WSJ 12/12/2024, Reuters 12/12/2024. Data from Morningstar Direct. US Bureau of Labor Statistics 12/6/2024, 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.