This Weekly Market Update reviews the top market headlines: Mixed Inflation Report for December, Marginal Improvement in Small Business Confidence , Q4 Earnings Expectations Fade.
  • The Consumer Price Index (CPI) rose 3.4% in December versus the prior year
  • The NFIB Small Business Optimism index rose to 91.9 in December
  • The aggregate expected Q4 2023 earnings growth for S&P 500 companies is -0.1%, as of last Friday

Mixed Inflation Report for December: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.3% in December compared to the prior month, an increase from November's 0.1% rise. Versus the prior year, the CPI increased 3.4%, up from a 3.1% rate in November. A key contributor to the higher CPI reading in December was a continued rise in the shelter category, which rose 0.5% on the month and 6.2% versus last year. The "core" CPI, which excludes volatile food and energy items, also rose 0.3% on the month and was up 3.9% compared to the prior year, a touch lower than the 4.0% pace in November.

Marginal Improvement in Small Business Confidence: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index edged slightly higher in December to 91.9 versus 90.6 in November, with more owners expecting better business conditions over the next six months. However, this marked the 24th consecutive month in which the readingwas below the 50-year average of 98. According to the report, 23% of owners surveyed cited inflation as the greatest issue their business currently faces, while 40% of owners reported job openings that were unfilled.

Q4 Earnings Expectations Fade: Corporate earnings season got underway last week as a handful of large banks issued financial results for Q4 2023. On the whole, the aggregate estimated earnings growth rate for S&P 500 companies, based on a blend of early reports and analysts' forecasts, has fallen in recent weeks, standing at -0.1% at the end of last week versus +3.9% as of 11/3/2023, according to FactSet. A key factor behind the weakening trend is disappointing results out of the financial sector, which is now expected to show an earnings decline of 11.5%. Should the overall S&P 500 earnings growth rate end up negative, it would be the fourth time for such an occurrence in the last five quarters.

As of January 16, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.33% -0.28% -0.28% 16.32%
S&P 500 1.87% 0.34% 0.34% 22.08%
Russell 2000 0.00% -3.73% -3.73% 5.65%
MSCI EAFE 0.87% -0.40% -0.40% 10.99%
MSCI Emerging Markets -0.57% -2.65% -2.65% 0.39%
FTSE NAREIT 1.17% -0.45% -0.45% 6.01%
Bloomberg Commodity -0.58% -0.49% -0.49% -6.98%
Barclays U.S. Aggregate 0.92% -0.29% -0.29% 2.06%

US Dep't of Labor 1/11/2023, NFIB 01/09/2024, FactSet. 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.