Wealth Management Weekly Update March 17, 2014

iStock_000024203309Small_350U.S. and World News

  • Tensions continue to mount overseas as rhetoric and vague threats of economic sanctions from President Obama and John Kerry against Russian action in Ukraine have fallen on deaf ears. The citizens of the Ukrainian province Crimea are scheduled to hold a referendum vote on Sunday in regards to joining the Russian Federation. Russia has stated that they will honor the results of the vote by the Crimean people, while John Kerry has stated that an annexation of Crimea by Russia will not be recognized by the United States and would bring with it strong consequences.
  • A bipartisan group of senators has agreed on a proposal to renew long-term jobless benefits for five months. The payments would be made retroactively from December, when the previous extension expired. The measure, which would cost $10 billion, is expected to pass through the Senate, but is expected to meet significant opposition in the House, making ultimate passage a toss-up.

Markets

  • Stock markets fell this week amid disappointing economic data from China and intensified rhetoric leading up to the Crimean referendum vote. The S&P 500 fell 1.92% for the week, closing at 1,841. The Dow Jones dropped by 2.29%, closing at 16,066. So far in 2014, the S&P is up 0.07% and the Dow Jones is now down 2.53%.
  • Treasury yields came back down this week following the increasing of tensions overseas with the 5 year and 10 year U.S. Treasury Notes yielding 1.54% and 2.66%, respectively.
  • The spot price of WTI Crude Oil ended the week down 3.54%, closing at $98.95 per barrel.  Year to date, Oil prices have risen 0.52%.
  • The spot price of Gold increased this week, gaining 3.19% and closing at $1,382.72 per ounce. Year to date, Gold prices are up 15.07%.

Economic Data

  • Initial jobless claims dropped by 8,000 from last week, coming in at 315,000 vs. consensus estimates of 330,000. The four week moving average for claims fell to 330,500. The Labor Department noted that there were no special factors affecting last week’s claims.
  • Consumer inflation in India fell for the third consecutive month in February, dropping to 8.1% from 8.8% in January. The decline comes as the Reserve Bank of India considers setting an inflation target after having raised interest rates three times since September.

Fact of the Week

  • According to the National Institute on Retirement Security, in 1975 85% of American workers in the private sector (non-government jobs) were covered by a defined benefit pension plan. This compares to just 16% of private sector workers being covered by pensions today, highlighting the dramatic shift from defined benefit pensions toward defined contribution plans such as 401(k)’s.

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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