Wealth Management Economic Update October 13, 2014

U.S. and World News

  • hong_kong_boat_320The crowds of pro-democracy protestors in Hong Kong have started to dwindle this week, after activist leaders agreed to talks with the government which are unlikely to go anywhere. Talks will center on “the basis for political development”, referring to plans for an open 2017 election of Hong Kong’s leader. The discussions are set against a backdrop of mistrust, with protesters accusing the government of insincerity, and the government complaining that pro-democracy leaders continue to encourage protestors to remain in the streets. Protest spokespeople have claimed that if these meetings are unsuccessful, they may take the campaign beyond street occupations that would include pro-democracy lawmakers getting involved with “non-cooperative actions.”
  • The Obama administration has called for new protocols to help stop the spread of Ebola, including additional passenger screening at airports and increased efforts to educate medical providers on how to handle cases. This comes following the death of the man who was hospitalized in Dallas with the virus and a nurse in Spain becoming the first person to contract the virus outside of West Africa.
  • Minutes released from the most recent Federal Reserve meeting showed the committee’s concern with slowing growth overseas, the strengthening dollar and weakening inflationary pressures. These issues indicate that the Fed will move cautiously on raising rates following the end of its Quantitative Easing program, which is set to terminate at the end of this month. The release of these minutes led to a strong rally in stock markets on Wednesday, but those gains were short lived.

Markets

  • After quite a volatile week, the markets tumbled with the S&P 500 declining 3.14% and closed at 1,906. Similarly, the Dow Jones Industrial Average dwindled down 2.74% and closed at 16,544. Year to date, the S&P is up 3.13% and the Dow is down .20%.
  • Following the Federal Reserve’s announcement, interest rates continued their decline this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.54% and 2.29%, respectively.
  • The spot price of WTI Crude Oil continued to fall this week, dropping 4.68%, closing at $85.54 per barrel. Year to date, Oil prices are down 8.36%.
  • The spot price of Gold increased by 2.65% this week, closing at $1,222.96 per ounce. Year to date, Gold prices are up 1.77%.

Economic Data

  • Initial jobless claims declined from last week, coming in at 287,000 vs. consensus estimates of 295,000. The Labor Department noted no special factors affecting the report. The four week moving average for claims now stands at 288,000, which is an 8 year low.

Fact of the Week

  • The national debt as of September 30th stood at $17.824 trillion, a more than $1 trillion increase from last year when it stood at $16.738 trillion. Ten years ago the national debt was at $7.379, meaning that it has increased $10.445 trillion over that time.

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 CFA® – (630) 906-5545 bjohnson@oldsecond.com
Joel Binder, SVP – (630) 844-6767 jbinder@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Tamara Wiley, CFP® – (630) 844-3222 twiley@oldsecond.com
Ed Gorenz, VP – (630) 906-5467 ejgorenz@oldsecond.com

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