Wealth Management Weekly Update August 30, 2013

map-syria-middleeast_000019350818U.S. and World News

  • As evidence of a chemical strike against its own people has come to light in Syria, the prospect of military intervention against the Assad regime in the country’s civil war has intensified. World leaders are considering their best course of actions with the U.S. originally stating its intention to act early in the week. The Obama administration has since backed off those comments in the wake of differences of opinions between the U.S. and its allies such as the U.K. with the President saying today that no final decision has been made yet and that any military intervention would be limited and with no “boots on the ground”. The situation is very fluid and has been affecting stock and oil markets as new details have come available.
  • Nasdaq has taken responsibility for the three-hour trading outage last week, known as the Flash Freeze after trying to place blame initially on the New York Stock Exchange. The exchange said the outage was caused by a software bug and other technology issues related to a data feed. Banks and brokerages are reportedly discussing how to prevent another outage, including giving a non-exchange entity responsibility for managing data feeds.

 

Markets

  • Stock markets fell this week on the Syrian conflict, Fed tapering concerns and light volume. The S&P 500 Index fell by 1.84%, closing at 1,633. The Dow Jones Industrial Average was down 1.33% to close at 14,810. The S&P and the Dow respectively are up 14.50% and 13.02% year to date.
  • Treasury yields were volatile again this week with the 10 year treasury falling a bit to 2.79%. Meanwhile, the 5 year treasury rose a bit and ended the week at 1.65%.
  • The spot price of WTI Crude Oil increased this week by 1.18%, closing at $107.67 per barrel. Year to date, oil is up 15.03%.
  • The spot price of Gold paused this week after its recent climb higher, declining by 0.18% and closing at $1,395.20/ounce. Gold is now down 16.72% this year.

 

Economic Data

  • Weekly Initial Jobless Claims fell this week, dropping by 5,000 and coming in at 331,000 vs. expectations of 332,000. The 4-week moving average of jobless claims remained steady at 331,000, a post-recession low.
  • The Case-Shiller home price index rose less than expected in June, continuing the recent trend toward more moderate rates of home price appreciation. Prices rose 0.9% in June vs. expectations of 1.0% and have increased by 12.1% over the past 12 months.
    • Pending home sales also came in lower than expected, declining by 1.3% in July vs. expectations of flat sales. In the last 12 months, pending home sales have risen 6.7%.
  • GDP growth in the 2nd quarter was revised up more than expected to 2.5% vs. expectations of 2.2%. The initial estimate of 2nd quarter GDP growth was 1.7%. Stronger net exports and inventories than originally estimated accounted for the majority of the upward revision.

 

Fact of the Week

  • Highlighting some of the troubles with instituting “universal health care”, a study by the National Institute for Health Care Management shows that 1% of the population accounts for 21.8% of all health care expenditures in the U.S. and 5% of the population accounts for nearly half of the nation’s health care spending at 49.5%. Meanwhile, 50% of the population accounts for just 2.7% of health care expenditures and 15% of the population account for a negligible amount of the country’s total health care costs.

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

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Jean Van Keppel CFA® – (630) 906-5489 jvankeppel@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

Visit Old Second Wealth Management

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