This Weekly Financial Markets Update reviews the top market headlines: A Volatile Week for Stocks, Mixed Business Activity in July, Corporate Earnings Strengthen in Q2
  • The S&P 500 index has fallen 2% so far in the third quarter of 2024
  • The ISM Manufacturing Index fell to 46.8% in July
  • S&P 500 company earnings are on track to grow 10.8% in Q2 2024 over the prior year

Top Three Market Headlines

A Volatile Week for Stocks: The first full trading week of August proved a volatile one for U.S. stocks. The S&P 500 index endured a 3% decline on Monday, extending losses from the prior week triggered by weaker-than-expected economic data. The CBOE VIX index, an implied measure of market volatility based on the pricing of index option contracts, briefly spiked to 65 in early Monday trading, the highest level in more than four years and more than triple its long-term average of 20. Monday's steep loss was subsequently nearly erased after strong rebounds on Tuesday and Thursday, but the S&P still finished the week marginally in the red, its fourth straight weekly loss. The index remains up nearly 13% on the year.

Mixed Business Activity in July: Business activity was mixed across the U.S. economy in July, according to surveys of business managers conducted by The Institute for Supply Management (ISM). The ISM Services Index registered 51.4% on the month, above the 50% threshold that differentiates expansion of business activity from contraction. This signaled a quick rebound for the sector after a 48.8% reading in June. Alternatively, the ISM Manufacturing Index weakened to 46.8%, down from 48.5% in June and the 20th sub-50% reading in the last 21 months.

Corporate Earnings Strengthen in Q2: As corporate earnings reporting season winds down, the second quarter of 2024 is shaping up as the strongest quarter for earnings growth in nearly three years. With more than 90% of S&P 500 companies having issued their Q2 financial results as of last week, the aggregate earnings growth rate―based on a blend of actual reports and analysts' forecasts for the remaining companies―stood at 10.8% over Q2 of the prior year, according to FactSet. This represents the fourth straight quarter of positive year-over-year growth and the highest rate since Q4 2021, and also exceeds analysts' estimate of 8.9% at the start of the quarter.

As of Aug 09, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.02% -1.72% 9.38% 16.59%
S&P 500 -0.02% -2.02% 12.96% 21.42%
Russell 2000 -1.32% 1.71% 3.48% 9.41%
MSCI EAFE -0.29% -1.23% 4.05% 9.87%
MSCI Emerging Markets 0.27% -1.60% 5.77% 8.15%
FTSE NAREIT Equity 0.69% 7.81% 7.66% 15.44%
Bloomberg Commodity 0.93% -4.84% 0.05% -5.39%
Bloomberg U.S. Aggregate -0.82% 3.09% 2.36% 6.31%

ISM 8/2/24 & 8/5/24, WSJ 8/9/2024, FactSet 8/9/2024. 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.