U.S. and World News
- President Obama announced his four pronged plan for dealing with terrorist group Islamic State (ISIS) in an address this week. The plan includes training Iraqi and Kurdish forces fighting ISIS, increasing counterterrorism efforts by working with allies to prevent foreign fighters from joining ISIS, humanitarian assistance to those in danger from ISIS and finally, ramping up airstrikes wherever the terrorists are, including in Syrian land. The four point plan has the objective to “degrade and ultimately destroy” ISIS. President Obama stressed in his address that this action was different from prior wars with Iraq and Afghanistan, and highlighted prior examples of Yemen and Somalia as successful operations that were similar in nature.
- The European Union is set to implement new sanctions on Russia but officials say that they will determine the application of the sanctions based on Russia’s cooperation with the ceasefire agreement that was reached last week. The sanctions would hit Russia’s state-controlled banks and oil companies. In response to the new sanctions, Russia has indicated that it may ban Western airlines from flying over its territory. The U.S. announced its own new round of sanctions on Friday, which target Russian financial services, energy and defense and seek to further isolate Russia from the global financial system until they genuinely work towards a diplomatic resolution of the crisis.
- Residents of Scotland will go to the polls next Thursday to vote on a referendum that could make them an independent country, breaking up the United Kingdom. Polling has shown increasing support for independence, with several polls indicating it’s a 50-50 proposition. Several issues lie ahead for Scotland should they vote for their independence, including choosing a currency, whether to join the European Union, the sharing of North Sea oil revenue and its share of the British national debt. UK Prime Minister David Cameron made a plea to the Scots to vote down independence, saying “We do not want this family of nations to be ripped apart. If the U.K. breaks apart, it breaks apart forever.”
- Markets lost ground this week as the S&P 500 fell 1.05% and closed at 1,986. The Dow Jones Industrial Average lost 0.81% and closed at 16,987. Year to date, the S&P is up 9.01% and the Dow is up 4.25%.
- Interest rates rose again this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.82% and 2.61%, respectively.
- The spot price of WTI Crude Oil continued its decline and fell by 1.19% this week, closing at $92.18 per barrel. Year to date, Oil prices have decreased 1.94%.
- The spot price of Gold dropped by 3.04% this week, closing at $1,230.29 per ounce. Year to date, Gold prices are up 2.38%.
- Initial jobless claims rose a bit from last week, coming in at 315,000 vs. consensus estimates of 300,000. The Labor Department noted that claims are difficult to measure around the Labor Day holiday. The four week moving average for claims now stands at 304,000.
Fact of the Week
- According to the Federal Reserve Bank of New York, as of 6/30/12, 8.9% of student loan debt (measured by dollar amount outstanding) was at least 3 months delinquent or is in default. Two years later, the proportion of student loan debt that is delinquent or in default has risen to 10.9%. With an estimated $1.08 trillion of student loan debt outstanding, this leaves nearly $118 billion of delinquent or defaulting debt that isn’t dissolvable in bankruptcy.
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