This Weekly Financial Markets Update reviews the top market headlines: Companies Report Strong Q4 Earnings, CEO Confidence Rises in Q1, Fed Minutes Reveal Caution on Rate Cuts
  • Q4 2024 earnings growth for S&P 500 companies was the highest in more than three years
  • The Measure of CEO Confidence rose to a three-year high in Q1
  • The current federal funds rate target stands at 4.25% to 4.50%

Top Three Market Headlines

Companies Report Strong Q4 Earnings: Corporate earnings reports issued in recent weeks indicate that earnings growth accelerated across corporate America in Q4 2024. With 77% of S&P 500 companies reporting results through mid-February, the overall annual earnings growth rate for Q4 for such companies (including both actual results and estimates for those yet to report) stood at 16.9%, according to FactSet. If this rate stands, it will mark the highest growth rate since Q4 2021. Further, 76% of companies have reported a positive earnings surprise relative to brokerage firms' expectations, while 62% have reported a positive revenue surprise.

CEO Confidence Rises in Q1: The Measure of CEO Confidence, an index published by The Conference Board, jumped by nine points to a level of 60 in Q1 2025, the organization reported last week. This marks the highest level in three years for the index, which is based on surveys of more than 100 CEOs. Optimism about current and future economic conditions surged in the quarter, with 44% of CEOs saying economic conditions were better than six months ago, up from only 20% last quarter. In addition, CEOs expressed fewer concerns about various business risks, such as regulatory uncertainty and supply chain disruptions.

Fed Minutes Reveal Caution on Rate Cuts: Minutes released last week of the Federal Reserve's January meeting revealed officials' preference to stand pat on interest rate policy for the foreseeable future, echoing recent comments made by Chairman Jerome Powell. At the meeting, officials unanimously agreed to hold the target range for the federal funds rate at 4.25% to 4.50%, after having enacted a one percentage-point cut between September and December. Governors noted they would look for further progress on inflation before cutting rates further, with some indicating the potential risk to further disinflation from the enactment of tariffs.

As of February 21, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.07% 4.09% 4.09% 18.72%
S&P 500 -1.63% 2.42% 2.42% 22.35%
Russell 2000 -3.69% -1.44% -1.44% 11.57%
MSCI EAFE -0.12% 8.17% 8.17% 11.00%
MSCI Emerging Markets 2.00% 6.88% 6.88% 15.15%
FTSE NAREIT Equity -0.03% 2.47% 2.47% 14.38%
Bloomberg Commodity 0.98% 8.83% 8.83% 16.25%
Bloomberg U.S. Aggregate 0.35% 1.47% 1.47% 5.02%

The Federal Reserve Board 2/19/2025,The Conference Board 2/20/2025, FactSet 2/14/2025. 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.