Wealth Management Weekly Update September 16, 2013

map-syria-middleeast_000019350818

U.S. and World News

  • President Obama has asked Congress to delay any vote on military strikes against Syria while talks take place between the U.S., Russia and Syria over a proposal in which Syria would forfeit all of its chemical weapons. Obama in his televised address this week remained skeptical of the plan as Syria may use it as a delay tactic and continued to try to make his case for action.
  • According to sources out of Japan, President Obama plans to name Larry Summers as the next Chairman of the Federal Reserve, replacing Ben Bernanke. The report said the announcement could come as early as next week at the Fed’s next policy meeting. However, given that the report strangely emanated from Japan, many are questioning its legitimacy.
  • In the largest shakeup since 2004, the Dow Jones Industrial Average index announced that Alcoa (AA), Bank of America (BAC) and Hewlett-Packard are being removed from the iconic 30 stock index on September 20th. Replacing them will be Nike (NKE), Goldman Sachs (GS) and Visa (V). The index is constructed to have constituents of all of the economic sectors and be representative of the U.S. economy as a whole.
  • House Republican leaders have postponed a vote that would have approved the financing of the government through December, creating the possibility of a government shutdown. The delay came because of opposition among conservative Republicans to parts of the Obamacare legislation. The government faces a shutdown if legislation isn’t approved by September 30th. This is in addition to the impending reaching of the debt ceiling, which will be occurring in mid-October.

 

Markets

  • Stock markets gained again this week as the S&P 500 Index rose by 1.98%, closing at 1,688. The Dow Jones Industrial Average was up 3.04% to close at 15,376. The S&P and the Dow respectively are up 18.36% and 17.34% year to date.
  • Treasury yields dipped this week with the 5 year and 10 year treasury yielding 1.70% and 2.89% respectively.
  • The spot price of WTI Crude Oil declined this week on lessening odds of a Syria strike, falling by 1.85%, closing at $108.49 per barrel. Year to date, oil is up 15.91%.
  • The spot price of Gold tumbled this week, declining by 4.82% and closing at $1,324.74/ounce. Gold is now down 20.93% this year.

 

Economic Data

  • Weekly Initial Jobless Claims fell sharply this week, dropping by 38,000 and coming in at 292,000 vs. expectations of 330,000. However, this data cannot be relied upon as an indication of labor market strength as the Labor Department noted the decline was due to processing problems in two states that underestimated the amount of claims.
  • Chinese data provided yet more evidence that the country’s economy is stabilizing and will avoid a hard landing, with industrial production accelerating to 10.4% on the year vs. expectations of 9.9%. Retail sales and urban investment also grew strongly and beat forecasts.

 

Fact of the Week

  • Saturday marks the 5 year anniversary (9/14/08) of the U.S. government declining to rescue Lehman Brothers, forcing the 158 year old firm to file for Chapter 11 bankruptcy in what is regarded as beginning of the global financial crisis. It was the largest bankruptcy in U.S. history with Lehman claiming over $691 billion in assets at the time of the filing.

 

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

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s