Wealth Management Weekly Update February 22, 2013

U.S. and World News

  • Italy is due to hold elections for a new parliament this weekend. The vote comes at a crucial time for the country as it has been one of the hardest hit nations during the global financial crisis. The rest of the world will be watching too because they have a great deal at stake: if Italy gets this vote wrong, it may put back into question the future of its economy and the survival of the Euro.
  • The minutes from the January Federal Reserve meeting were released this week and they indicate that some members of the Committee don’t agree on the future plans for monetary policy. There was significant discussion of the risks around Quantitative Easing, which may prompt an early end to the easing monetary policy. The markets turned negative on the comments, perhaps worried about an earlier than anticipated end to QE.

 

Markets

  • Markets were relatively flat again this week with the S&P 500 Index down by -0.4% this week and closed at 1,521. The Dow Jones Industrial Average on the other hand was up on the week, posting a gain of 0.2% and closed at 13,973. Equity markets paused a bit this week but maintain their great start to 2013; the S&P and the Dow are up 6.3% and 6.8% respectively.
  • Treasury yields climbed a bit this week as the 5 year and 10 year treasury finished the week at 0.85% and 1.97% respectively.
  • The spot price of WTI Crude Oil fell this week by -3.1%, closing at $93.42 per barrel. So far in 2013, oil prices are up 0.7%.
  • The spot price of Gold fell by -1.9% this week and closed at $1580.05/ounce. Year to date in 2013, gold is down -5.7%.

 

Economic Data

  • Weekly Initial Jobless Claims rose by 21,000 and came in higher than expected at 362,000 vs. consensus expectations of 355,000. The 4-week moving average of jobless claims rose to 361,000. Volatility remains in the claims numbers, which may be the result of distortions caused by seasonal adjustments to the data.
  • Eurozone manufacturing PMI data slipped to a reading of 47.8 in February, from 47.9 in January. The data suggests that the Eurozone is on course to contract for the fourth consecutive quarter. Data out of France was particularly troubling as their downturn seems likely to deepen and they’re positioning themselves more in line with the troubled periphery countries of Europe, as opposed to the strong core countries like Germany.

Fact of the Week

  • In a case of investor psychology, a study by four economists from Cornell, Carnegie Mellon and Vanguard found that the number of investors who check their accounts each day drops by about 10% following a market decline compared to a market increase.

Please contact a member of the Wealth Management Department if you have any questions about this information.

Rich Gartelmann – (630) 844-5730 rgartelmann@oldsecond.com
Dayle Malone – (630) 906-5489 dmalone@oldsecond.com 
Brad Johnson – (630) 906-5545 bjohnson@oldsecond.com 
Joel Binder – (630) 844-6767 jbinder@oldsecond.com
Jacqueline Runnberg – (630) 966-2462 jrunnberg@oldsecond.com

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