Wealth Management Weekly Update February 3, 2014

U.S. and World News

  • In Ben Bernanke’s final Fed meeting as Chairman, the committee announced an additional $10 billion per month reduction in the pace of its asset purchases, bringing monthly purchases to $65 billion from $75 billion. The cutback will be split evenly between Treasury and Mortgage Backed Security purchases. If the Fed continues this pace of tapering under new head Janet Yellen, the Committee is on track to end its purchases in October.

Markets

  • Stock markets fell slightly this week as the S&P 500 ended the week down 0.43%, closing at 1,783 and the Dow Jones decreased by 1.13%, closing at 15,699. So far in 2014, the S&P and Dow are down 3.56% and 5.30% respectively.
  • Treasury yields tumbled once again this week. The 5 year and 10 year treasury now yielding 1.50% and 2.65% respectively.
  • The spot price of WTI Crude Oil increased slightly this week by 0.86%, closing at $97.47 per barrel. Oil prices are down 1.10% in 2014.
  • The spot price of Gold fell this week, losing 2.07% and closing at $1,243.83 per ounce. Year to date, Gold prices are up 3.51%.

 Economic Data

  • Initial jobless claims rose 22,000 from last week, coming in at 348,000 vs. consensus estimates of 330,000. The four week moving average for claims rose to 333,000. The Labor Department noted that there was nothing unusual in the data this week as we exit the holiday season.
  • Pending home sales dropped 8.7% in December vs. expectations of a loss of only 0.3%. This is the largest one month decline in pending home sales since the expiration of the first-time homebuyer tax credit in 2010. Declines were seen broadly across geographic region, suggesting that the unusually cold weather was not the primary driver for the drop.
  • The Case-Schiller home price index rose 0.9% in November vs. expectations of a 0.8% increase. This report contrasts the FHFA house price index report from earlier this month that showed a disappointing 0.1% gain in prices for November. Over the last 12 months of data, the Case-Schiller index rose 13.7%.

Fact of the Week

  • Medicare is in its 50th year of existence, having begun in 1965. The age of eligibility for Medicare was set at 65 when first established and remains at that age today despite the fact that average life expectancy has increased by 8.4 years during that time frame.

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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