Wealth Management Weekly Update May 12, 2014

U.S. and World News

  • ukraine_moscow_mapViolence continued to escalate in Ukraine this week as the country sent special forces to the port city of Odessa after pro-Russian separatists stormed a police station and freed 70 fellow activists. Then, pro-Russian militants killed four government servicemen and downed a military helicopter as Ukraine sought to regain ground lost in the Eastern part of the country. Meanwhile, Putin and other Russian leaders have called to postpone the May 25th elections in Ukraine, a move in an effort to further destabilize the country. Secretary of State John Kerry warned that the U.S. will impose further sanctions if “Russian elements” continue to sabotage the democratic process in Ukraine.

Markets

  • The S&P 500 fell slightly by 0.06% for the week, closing at 1,878.The Dow Jones rose to a new record high this week, climbing by 0.54% and closing at 16,583. So far in 2014, the S&P is up 2.35% and the Dow Jones is up 0.84%.
  • Treasury yields were largely flat this week, keeping this year’s unexpected drop in interest rates intact. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.64% and 2.63%, respectively.
  • The spot price of WTI Crude Oil ended the week up 1.04%, closing at $100.08 per barrel.  Year to date, Oil prices have climbed 2.88%.
  • The spot price of Gold fell by 0.84% this week, closing at $1,288.79 per ounce. Year to date, Gold prices are up 7.25%.

Economic Data

  • Initial jobless claims fell by 25,000 from last week, coming in at 319,000 vs. consensus estimates of 325,000. The Labor Department noted no special factors in the data like they had done the last few weeks during the Easter and spring break seasons. The four week moving average for claims moved up for the third consecutive week, up to 325,000, after seeing several weeks of decline.
  • 1st quarter earnings reports are nearly all in with 91% of the S&P 500 having reported. Overall, corporate profits weren’t as bad as many analysts had feared given the harsh weather to start the year. 69% of companies beat bottom line earnings expectations while 53% were able to beat top line sales expectations. Utilities faired the best in the first quarter, aided by increased demand due to the colder than normal winter. Consumer staples stocks featured the worst reports with 52% of the sector exceeding earnings expectations and only 39% having better than expected revenue.

Fact of the Week

  • In a recent study conducted by Mark Rank of Washington University and Thomas Hirschl of Cornell, 44 years of personal income data for individuals from ages 25 to 60 (prime working years) were analyzed to see what levels of affluence Americans may experience during their lives. Surprisingly, it turns out that 12% of the U.S. population will find themselves in the infamous “1%” of income distribution for at least one year. Additionally, 39% of Americans will spend at least a year in the top 5% of income distribution, 56% will be in the top 10% at some point and a whopping 73% of the population will have at least one year in the top 20% of the country’s income distribution. The findings cast serious doubt on the notion of a static 1% and 99% class structure that is often portrayed in the U.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 CFP® – (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