This Weekly Financial Markets Update reviews the top market headlines: Headline Inflation Eases but Core Rate Remains Sticky, Small Business Optimism Improves Modestly in September, Fed Minutes Indicate Firm Support for Recent Rate Cut
  • The "core" Consumer Price Index rose 3.3% in September versus last year
  • The NFIB Small Business Optimism Index rose to 91.5 in September
  • The Federal Reserve lowered the target federal funds rate by 0.50 percentage points in September

Top Three Market Headlines

Headline Inflation Eases but Core Rate Remains Sticky: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.2% in September from the prior month, or 2.4% on a year-over-year basis. The latter figure was down slightly from a 2.5% pace in August and was the lowest annual rate since February 2021. "Core" CPI, which excludes food and energy items, increased 0.3% in September and was up 3.3% versus last year, a modest uptick from 3.2% in August. Core items that increased in September included shelter, car insurance, medical care, apparel, and airline fares.

Small Business Optimism Improves Modestly in September: The National Federation of Independent Business (NFIB) Small Business Optimism Index ticked marginally higher in September to 91.5 from 91.2 in the prior month. This remained, however, below the 50-year historical average of 98 for the 33rd consecutive month. According to the report, inflation remains the leading concern among small business owners, with 23% identifying it as the main issue in operating their business. Labor quality also remained a top concern, cited by 17% of business owners.

Fed Minutes Indicate Firm Support for Recent Rate Cut: Minutes were released last week from the Federal Reserve's latest policy meeting in September, at which officials lowered the target range for their interest rate benchmark, the federal funds rate, by one-half of a percentage point to 4.75%-5.00%. According to the minutes, the decision was backed by 11 of the 12 members of the rate-setting committee, with participants observing that the lower target would bring policy "into better alignment with recent indicators of inflation and the labor market." The lone dissenting member supported a more modest quarter-percentage point rate cut.

As of October 11, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.64% 0.14% 18.83% 29.96%
S&P 500 1.13% 0.96% 23.25% 34.80%
Russell 2000 0.99% 0.22% 11.42% 27.86%
MSCI EAFE 0.25% -2.00% 10.73% 21.54%
MSCI Emerging Markets -1.66% -0.94% 15.76% 24.31%
FTSE NAREIT Equity -0.36% -2.49% 13.05% 29.38%
Bloomberg Commodity -1.16% 0.60% 6.50% 3.16%
Bloomberg U.S. Aggregate -0.46% -1.46% 2.93% 9.77%

US Bureau of Labor Statistics 10/10/2024, NFIB 10/8/2024 WSJ 10/11/2024, Federal Reserve Board 10/9/2024. 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.