Top Three Market Headlines
Fed Foreshadows a Rate Cut: In comments made last week, Federal Reserve Chairman Jerome H. Powell painted a mixed picture of the U.S. economy while seemingly laying the groundwork for an interest rate cut when the Fed meets at the end of July. On the bright side, according to Mr. Powell, the economy “performed reasonably well over the first half of 2019” and the labor market is healthy. However, he also noted that “crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity.” In addition, inflation has been weaker than the Fed had previously anticipated, a development that “strengthened the case for a somewhat more accommodative policy,” according to the Chairman.
U.S. Hiring Rebounds in June: Easing fears of a jobs slowdown after a surprisingly weak May report, U.S. hiring rebounded in June as employers added 224,000 jobs, according to the U.S. Department of Labor. This marked a record 105 straight months of job growth. Hiring in June was led by the professional services and health-care sectors, both of which are relatively less exposed to trade tensions and a cooling global economy. Wages rose 3.1% from a year earlier, remaining in line with the pace seen in prior months, while the unemployment rate rose slightly to 3.7% from 3.6% as more workers entered the workforce.
Eurozone Growth and Inflation Forecasts are Trimmed: The European Commission, the executive branch of the European Union, last week reduced its euro-area growth and inflation forecast for 2020, reflecting more pronounced weakness in the region stemming from trade tensions and policy uncertainty. The GDP growth forecast was trimmed from 1.5% to 1.4%, while expected inflation was lowered to a modest 1.3%. The reduced forecasts come just two weeks before the next policy meeting of the European Central Bank, which will consider injecting fresh stimulus into the Eurozone.
Data Points
- The Federal Reserve’s current target range for the federal-funds rate is 2.25%-2.50%.
- U.S. employers have added 172,000 jobs per month, on average, in the first half of 2019.
- Eurozone GDP growth is expected to decelerate from 1.9% in 2018 to 1.2% in 2019 and 1.4% in 2020
|
As of July 12, 2019 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
0.21% |
1.41% |
17.87% |
5.30% |
|
S&P 500 |
0.82% |
2.53% |
21.54% |
9.89% |
|
Russell 2000 |
-0.34% |
0.25% |
17.28% |
-5.80% |
|
MSCI EAFE |
-0.55% |
-0.03% |
13.99% |
0.66% |
|
MSCI Emerging Markets |
-0.76% |
-0.11% |
10.46% |
0.66% |
|
FTSE NAREIT |
-0.08% |
2.33% |
20.52% |
12.31% |
|
Bloomberg Commodity |
2.46% |
1.80% |
6.96% |
-1.30% |
|
Barclays Aggregate |
-0.21% |
-0.36% |
5.73% |
7.19% |
Bloomberg 7/10/2019,7/11/2019, WSJ 7/11/2019, 7/5/2019, Federal Reserve 7/10/2019. 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.