Wealth Management Weekly Update January 6, 2014

medical_000009719993_250pxU.S. and World News

  • More than 2.1 million people have signed up for the Obamacare mandated health insurance which went into effect on January 1st. This marks an addition of 1.6 million consumers during the month of December but is a good deal below the 3.3 million that was initially projected to have signed up by year end. Reports indicate that only around half of those who have signed up for coverage have actually paid for their plans. As a result, insurers are scrambling to process payments and issue membership cards as patients begin showing up for their first appointments with their new coverage.
  • Extended jobless benefits expired last Saturday, affecting 1.3 million long-term unemployed who had been receiving an average of $300 a week from the federal government. Renewing the program, which was introduced at the height of the financial crisis, would cost an estimated $25 billion per year but could also cut an estimated 0.2% from GDP growth in the 1st quarter of 2014.
  • Latvia became the 18th member of the Eurozone this week, following the path of other former Soviet states, Estonia and Slovakia. Latvia joins the group a few years separated from a major debt crisis of their own and instability among many of the member nations like Greece, Portugal, Spain and Cyprus.

Markets

  • Stock markets ended 2013 on a high note with both the S&P 500 and the Dow Jones indices hitting their 52 week highs on the last trading day of the year. The S&P 500 Index gained 32.38% in 2013 and the Dow registered gains of 29.65% in the year. The S&P ended up closing down for the week by 0.52%, closing at 1,831 and the Dow Jones was virtually unchanged on the week, closing at 16,470.
  • Treasury yields remained flat this week with the 5 year and 10 year treasury now yielding 1.74% and 3.00% respectively. Highlighting how much rates rose in 2013, the 5 year treasury began the year with a 0.72% yield and the 10 year yielding 1.75%
  • The spot price of WTI Crude Oil fell this week by 6.05%, closing at $94.25 per barrel. In 2013, Crude Oil prices rose 5.81%.
  • The spot price of Gold rose a bit this week, gaining 2.00% and closing at $1,237.49 per ounce. 2013 was a brutal year for Gold prices, the metal’s first losing year in over a decade, experiencing a loss of 28.27%. 

Economic Data

  • Initial jobless claims rose from last week to 339,000 vs. consensus estimates of 342,000. The four week moving average for claims rose to 348,000. The Labor Department noted that while no states estimated claims, seasonal adjustment around the holidays may be affecting claims numbers.
  • The Case-Shiller home price index rose 1.05% in October vs. consensus expectations of 0.95%. Over the last 12 months of data, prices have risen a strong 13.6%.

Fact of the Week

  • The number of Initial Public Offerings (IPOs) jumped 59% in 2013 to a total of 230 new stock issues. The dollar amount raised in the IPO market climbed 31% to $62 billion as companies took advantage of favorable market conditions and low interest rates.

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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