- After 16 days, the partial shutdown of the U.S. Government ended on Thursday with a short term agreement being reached. Congress approved a deal to finance the U.S. government until January 15th and raised the debt ceiling on the government borrowing. This new debt ceiling deadline is somewhere between February 7th and mid-March depending on how the Treasury chooses to use any of the special provisions at their disposal. This sets us up for what will hopefully be a less painful repeat of this process in three months. As you’d probably expect of our esteemed congressmen, there were quite a few pork barrel provisions in the legislation, including $2.2 billion going to Republican Senate Minority Leader Mitch McConnell’s home state of Kentucky to complete an over-budget dam project.
- The online insurance exchanges recently opened as a provision of Obamacare continue to experience significant technology issues that are creating problems for people trying to enroll. Insurers say that the marketplaces are providing them with incorrect information such as duplicate enrollments, spouses being reported as children, missing data fields and suspect eligibility determinations. These problems are hurting the ability of insurers to process even the small numbers of people who have thus far attempted to sign up.
- Stock markets surged to new record highs this week following the deal in Washington D.C. as the S&P 500 Index increased by 2.06%, closing at 1,744. The Dow Jones Industrial Average was up 2.70% to close at 15,513. The S&P and the Dow respectively are up 22.32% and 17.52% year to date.
- Treasury yields fell this week with the 5 year and 10 year treasury yielding 1.34% and 2.59% respectively.
- The spot price of WTI Crude Oil fell this week by 1.11%, closing at $100.72 per barrel. Year to date, oil is up 7.75 %.
- The spot price of Gold rallied this week, rising by 5.26% this week and closing at $1316.30/ounce. Gold is now down 20.17% this year.
- Weekly Initial Jobless Claims remained elevated this week, coming in at 358,000 vs. expectations of 335,000. The Labor Department again attributed the high claims number to issues with California’s processing issues and the government shutdown. As a result, not much can be taken from the report.
- China saw its GDP growth accelerate to 7.8% in the 3rd quarter vs. 7.5% in the 2nd. This level of growth will help ease fears of a ‘hard landing’ for economic growth in the country as the country looks invest in infrastructure without seeing growth stall.
- With the government reopened, it was announced that the September nonfarm payroll report will be released next Tuesday (10/22), and the October employment report will be released November 8th as planned.
Fact of the Week
- It was five years ago this week (10/16/08) that Warren Buffet wrote his “Buy America, I Am” op-ed in the New York Times. Buffet encouraged investors to “be fearful when others are greedy, and be greedy when others are fearful.” Since Buffet wrote the letter, the S&P has gained 104.6% on a total return basis.
Please contact a member of the Wealth Management Department if you have any questions about this information.
Rich Gartelmann CFP® – (630) 844-5730 email@example.com
Jean Van Keppel CFA® – (630) 906-5489 firstname.lastname@example.org
Brad Johnson – (630) 906-5545 email@example.com
Joel Binder – (630) 844-6767 firstname.lastname@example.org
Jacqueline Runnberg – (630) 966-2462 email@example.com