Top Three Market Headlines
Retail Sales Increase Steadily In December: Sales at retailers rose in December at a seasonally adjusted pace of 0.3% compared to the prior month, the Commerce Department reported last week. Gains were seen in nearly every product category with the exception of motor-vehicles and department stores. Excluding autos and gasoline, which tend to be volatile on a month-to-month basis, sales rose 0.5%, the biggest monthly gain in five months. Results were particularly strong compared to the prior year, with sales excluding autos and gasoline jumping 5.7% from December of 2018, a period when consumers had pulled back from spending in response to the late-2018 stock market correction.
Inflation Remains Restrained: Inflation remained in check in the U.S. during the month of December, as evidenced by relatively modest readings for the consumer-price index (CPI). The broad CPI rose in the month by a seasonally adjusted 0.2% from November, or 2.3% versus the prior year. The less volatile core CPI, which excludes the effects of food and energy prices, rose a modest 0.1% on a monthly basis and 2.3% from last year. While the annual pace of gains exceeds the Federal Reserve’s 2.0% target, the central bank has signaled that it is comfortable letting inflation exceed the target to some degree, and is therefore unlikely to raise interest rates in the near future in response.
U.S. and China Sign “Phase One” Trade Deal: The United States and China last week officially signed the “phase one” trade agreement the two countries had finalized last December. According to the deal, China will increase its imports from the U.S. by approximately $200 billion over two years, consisting of manufactured goods, energy, services, and agricultural products. In response, the U.S. agreed to cancel scheduled tariffs on certain Chinese goods while cutting previously-applied tariffs on others; to be sure, the deal also leaves tariffs in place on approximately three-quarters of Chinese imports to the U.S., totaling approximately $370 billion. These tariffs are expected to be discussed in later negotiations, which are anticipated to begin soon but which many observers do not believe will conclude before the U.S. presidential election in November.
Data Points
- Retail sales excluding autos and gasoline increased 0.5% in December, the biggest gain in five months
- Inflation as measured by CPI rose 2.3% in December compared to the prior year
- China is expected to increase its U.S. imports by approximately $200 billion over the next two years
|
As of January 17, 2020 |
Week |
Quarter-To-Date |
Year-To-Date |
One-Year |
|
MSCI All Country World |
1.55% |
2.52% |
2.52% |
23.75% |
|
S&P 500 |
1.99% |
3.14% |
3.14% |
28.86% |
|
Russell 2000 |
2.54% |
1.90% |
1.90% |
17.52% |
|
MSCI EAFE |
0.85% |
1.04% |
1.04% |
18.87% |
|
MSCI Emerging Markets |
1.17% |
2.91% |
2.91% |
16.62% |
|
FTSE NAREIT |
2.72% |
2.09% |
2.09% |
21.00% |
|
Bloomberg Commodity |
-1.07% |
-1.25% |
-1.25% |
1.29% |
|
Barclays U.S. Aggregate |
0.06% |
0.50% |
0.50% |
9.19% |
WSJ 1/16, Bloomberg 1/16, MarketWatch 1/16; WSJ 1/14, MarketWatch 1/14; WSJ 1/15/2020. 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.