Wealth Management Economic Update October 27, 2014

U.S. and World News

  • pipeline_000039527184_300Russia and Ukraine failed to reach a gas deal during EU-brokered talks this week but agreed to meet again next week. Negotiations regarding prices for the winter supply of gas from Russia through Ukraine and the rest of Europe stalled when Russia added new conditions to the deal. Russia cut off supplies to Ukraine in June, demanding that Ukraine pay a debt of $5 billion which Russia is still requiring before any deal is made.
  • The panel chosen to pick candidates for Hong Kong’s 2017 election could be made more democratic according to the territory’s leader Leung Chun-ying. The comment was made just before the start of the first public talks between pro-democracy student leaders and government officials. Expectations are low for any major breakthroughs during the talks, but the mere concession that the candidate selection process could be more open is a step towards a more democratic process in Hong Kong.

Markets

  • The markets bounced back this week with the S&P 500 coming up 4.12% and closed at 1,965. Likewise, the Dow Jones Industrial Average climbed up 2.59% and closed at 16,805. Year to date, the S&P 500 is up 6.29% and the Dow Jones is up 1.38%.
  • Yields in the treasury markets also increased. The 10 year treasury came up to 2.27% and the 5 year treasury is yielding 1.50%.
  • The spot price of WTI Crude Oil fell slightly this week, dipping 0.95%, closing at $81.28 per barrel. Year to date, Oil prices are down 12.34%.
  • The spot price of Gold fell 0.59% this week, closing at $1,231.01 per ounce. Year to date, Gold prices are up 2.44%.

Economic Data

  • Initial jobless claims rose a bit from last week but remain quite low overall, coming in at 283,000 vs. consensus estimates of 281,000. The Labor Department noted no special factors affecting the report. The four week moving average for claims now stands at 283,000, which is the lowest it’s been since May 2000.
  • The Headline Consumer Price Index (measure of inflation) rose 0.1% in September vs. consensus expectations of it being flat. Core CPI (excludes food and energy) was also up 0.1% in September, picking up from a flat August. Over the past year, both headline and core CPI have risen a modest 1.7%.

Fact of the Week

  • According to Forbes, Bill Gates is the richest person in the world today with a net worth of $81 billion. The six living heirs of Sam Walton (Wal-Mart founder) who died in 1992 are worth a combined $153 billion.

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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