Wealth Management Weekly Update June 2, 2014

U.S. and World News

  • The ‘Chocolate King’ Petro Poroshenko has been elected as the new Ukrainian President and has said he is prepared to talk to Moscow and Russia has indicated their willingness to speak to Poroshenko as well. Poroshenko comes into office facing a number of challenges including boosting Ukraine’s lagging economy, preventing civil war and dealing with Russian attempts to destabilize the region.
  • Thailand’s new military rulers are in the process are restoring central parts of their economy after receiving royal endorsement to rule earlier this week. General Prayuth Chan-Ochoa claims the army had to restore order after nearly seven months of rioting. This weekend the U.S. cancelled military exercises in Thailand and threatened to cut military assistance. The question remains whether the U.S. will start to cut economic ties as well.

Markets

  • Markets continued to rise this week with the S&P 500 climbing 1.64% and closing at 1924.The Dow Jones followed suit by increasing 1.05% and closing at 16,717. Year to date, the S&P is up 4.07% and the Dow Jones is up 0.85%.
  • Treasury yields had little fluctuation this week with the exception of the 10 year yield which continued to decline. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.54% and 2.48%, respectively.
  • oil_barrel_000036578632SmallThe spot price of WTI Crude Oil fell after the holiday weekend, ending the week down 1.42%, closing at $102.87 per barrel. Year to date, Oil prices have climbed 6.66%.
  • The spot price of Gold dropped 3.32% this week closing at $1249.68 per ounce. Year to date, Gold prices are up 4.00%.

Economic Data

  • Initial jobless claims fell by 26,000 from last week, coming in at 300,000 vs. consensus estimates of 318,000. The Labor Department noted no special factors in the data. The four week moving average for claims now stands at 312,000.
  • Gross Domestic Product (GDP) growth in the 1st quarter was revised down from a +0.1% initial reading to a -1.0% contraction in economic growth. This was the first negative growth quarter since the 1st quarter of 2011. Many economists continue to believe the negative print was largely due to especially harsh weather during the quarter and doesn’t represent a trend of a shrinking U.S. economy.
  • The Case-Shiller home price index rose a solid 1.2% in March vs. consensus estimates of 0.7%. Nearly all cities measured showed price increases. The national index is now up 12.4% in the past 12 months.

Fact of the Week

  • In 1950 there were 16 American workers for every 1 Social Security retiree receiving benefits. It is estimated that by the year 2035, there will be just 2.1 American workers for every 1 Social Security retiree receiving benefits.

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

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