Wealth Management Weekly Update March 15, 2013

U.S. and World News

  • China is wrapping up the once per decade transfer of power in the country as Xi Jinping was officially elected as the new president, taking over for Hu Jintao. China also elected Li Keqiang to replace Wen Jiabao as Premier and will be the first in this position to hold a doctorate in economics.
  • Illinois has become only the second state to be accused of securities fraud by the SEC. The Commission says that the state misled bond investors from 2005-2009 about the ever worsening condition of its public workers’ pension plans by claiming that it was being properly funded when it was not. However, while Illinois has agreed to a cease and desist order, it has escaped any fines and hasn’t had to admit any wrongdoing for the time being.
  • The upper house of Japan’s parliament approved the appointment of Haruhiko Kuroda as the Governor of the Bank of Japan. His first major task will be to persuade the bank’s board to back his plans for further easing in an attempt to spur inflation in the country.

 

Markets

  • Markets posted positive gains again this week with the S&P 500 Index up by 0.6% closing at 1,561. The Dow Jones Industrial Average ended the week with a gain of 0.8% and closed at 14,514. Equity markets continued to add to their impressive 2013 returns; the S&P and the Dow are up 9.4% and 10.8% respectively year to date.
  • Treasury yields fell this week as the 5 year and 10 year treasury finished the week at 0.84% and 2.00% respectively.
  • The spot price of WTI Crude Oil rose this week by 1.7%, closing at $93.52 per barrel. So far in 2013 oil prices have risen 0.8%.
  • The spot price of Gold was slightly higher for the week rising 0.8% closing at $1591.55/ounce. Year to date in 2013, gold is down 5.0%.

 

Economic Data

  • Weekly Initial Jobless Claims fell again this week by 8,000 and came in lower than expected at 332,000 vs. consensus expectations of 350,000. The 4-week moving average of jobless claims decreased to 347,000, and this figure continues to improve upon its lowest level since March 2008.
  • Consumer sentiment fell in March to a reading of 71.8 (vs. consensus expectations of 78.0). The decline was mainly accounted for by a worsening in future expectations as concerns about a dysfunctional government weigh heavily on consumers. Despite the decline in sentiment, it appears that the damage to overall buying plans so far has been minimal.
  • The headline Consumer Price Index (used to measure inflation) rose by 0.7% month over month which was higher than consensus expectations of 0.5%. This was largely driven by a 9.1% increase in seasonally adjusted gas prices. The report points to continued moderate core inflation.

Fact of the Week

  • The first publicly traded securities in the United States were $80 million in U.S. government bonds, issued in 1790 to refinance Revolutionary War debt.

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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