This Weekly Financial Markets Update reviews the top market headlines: Hiring Rises Modestly in December, Business Surveys Depict Opposing Conditions, Fed Minutes Reflect Accord on Ending Rate Hikes
  • The Labor Department reported that the U.S. economy added 216,000 jobs in December
  • The ISM Manufacturing Index registered 47.4% in December
  • The current federal funds rate target range is 5.25% to 5.50%

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Top Three Market Headlines

Hiring Rises Modestly in December: The Labor Department reported last week that employers in the U.S. added 216,000 jobs in December, an increase from 173,000 in November. At the same time, the previously-reported estimated additions for October and November were revised lower by a combined total of 71,000; this left the trailing three-month average at 165,000, the lowest level in almost three years. Industries seeing the most job additions in December were leisure and hospitality, health care, and government. Meanwhile, the unemployment rate held steady at 3.7% in December, while average hourly wages rose at a 4.1% annual rate, up modestly from 4.0% in November

Business Surveys Depict Opposing Conditions: Business activity in the U.S. manufacturing and services sectors continued to point in different directions in December, though the gap narrowed, according to surveys of executives conducted by the Institute for Supply Management (ISM). The ISM Manufacturing Index recorded 47.4% for the month of December, its 14thconsecutive month below the 50% threshold that differentiates expansion of activity from contraction. Conversely, the ISM Services Index registered 50.6% for November, exceeding 50% for the 12th straight month, although this was down from a 52.7% reading in November.

Fed Minutes Reflect Accord on Ending Rate Hikes: Minutes released last week of the December meeting of the Federal Reserve's policy-setting committee indicated that members viewed the central bank's policy interest rate, the federal funds rate, "as likely at or near its peak." At the meeting, the Fed held the benchmark rate target range at 5.25% to 5.50%. According to the notes, officials determined that maintaining the current stance was supported by data indicating that inflation had receded in 2023 toward the central bank's 2% target. In addition, almost all participants indicated that a lower target rate range would be appropriate by the end of 2024.

As of January 08, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -1.58% -1.58% -1.58% 20.19%
S&P 500 -1.50% -1.50% -1.50% 25.39%
Russell 2000 -3.73% -3.73% -3.73% 13.07%
MSCI EAFE -1.26% -1.26% -1.26% 15.69%
MSCI Emerging Markets -2.09% -2.09% -2.09% 4.50%
FTSE NAREIT -1.60% -1.60% -1.60% 12.88%
Bloomberg Commodity 0.09% 0.09% 0.49% -3.23%
Barclays U.S. Aggregate -1.20% -1.20% -0.29% 3.45%

WSJ 1/5/2024, ISM 1/3/2024 & 1/5/2024, Federal Reserve 1/3/2024. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Gallagher Fiduciary Advisors, LLC ("GFA") is an SEC Registered Investment Adviser that provides retirement, investment advisory, discretionary/named and independent fiduciary services. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of AJG or its affiliates or to independent contractors; such payments do not change our fee. Securities may be offered through Triad Advisors, LLC ("Triad"), member FINRA/SIPC. Triad is separately owned and other entities and/or marketing names, products or services referenced here are independent of Triad. Neither Triad, Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice.