This Weekly Financial Markets Update reviews the top market headlines: Energy Prices Drive Inflation Higher in December, Small Business Optimism Rises Again in December, U.S. Retail Sales Rise in December
  • The core Consumer Price Index rose at an annual rate of 3.2% in December
  • The NFIB Small Business Optimism Index Rose to 105.1 in December, its highest level since October 2018
  • U.S retail sales increased 0.4% in December

Top Three Market Headlines

Energy Prices Drive Inflation Higher in December: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.4% in December versus the prior month, faster than November's 0.3% increase. On an annual basis the index was up 2.9%, also up from 2.7% in November. A key factor driving the increase in December was energy costs, which accounted for over 40% of the monthly increase. The "core" CPI, which excludes food and energy items, rose 0.2% in December, or 3.2% on an annual basis, both down marginally from rates of 0.3% and 3.2%, respectively, in November.

Small Business Optimism Rises Again in December: The National Federation of Independent Business (NFIB) Small Business Optimism Index continued surging in December, rising for the fourth straight month to 105.1. This was the highest reading since October 2018 and the second consecutive month above the 51-year average of 98. The net percent of owners expecting the economy to improve increased 16 points from last month to 52%, the highest since 1983. Like prior months, inflation and labor quality remained the most important problems reported by owners in running their business.

U.S. Retail Sales Rise in December: The U.S. Census Bureau reported last week that sales at U.S. retail and restaurant establishments increased 0.4% in December over the prior month. This was the fourth straight month of growth, though the rate was less than the 0.8% monthly rise reported in November. Excluding sales of automobiles and gasoline, however, which can be volatile on a monthly basis, sales of all other goods and services accelerated, increasing 0.3% versus 0.2% in the prior month. On an annual basis, overall sales in December rose 3.9% over last year, the second fastest year-over-year pace in 2024 after 4.1% in November.

As of January 17, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.57% 1.70% 1.70% 21.94%
S&P 500 2.93% 2.01% 2.01% 28.29%
Russell 2000 3.97% 2.08% 2.08% 20.60%
MSCI EAFE 1.95% 1.21% 1.21% 8.62%
MSCI Emerging Markets 1.26% -0.39% -0.39% 14.35%
FTSE NAREIT Equity 3.75% -0.03% -0.03% 11.99%
Bloomberg Commodity 1.26% 5.21% 5.21% 12.85%
Bloomberg U.S. Aggregate 0.99% -0.02% -0.02% 2.49%

NFIB 1/14/2025. US Dep't of Labor, 1/15/2025, WSJ 1/16/2025, US Census Bureau 1/16/2025. 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.