Wealth Management Economic Update December 15, 2014

U.S. and World News

  • greece_coins_000012931757_320Greece reentered the headlines this week as the Greek government has moved forward a crucial presidential vote by two months, and will now be held on December 17th. If Prime Minister Anotnis Samaras fails to secure a majority vote, the parliament of Greece will be dissolved and new elections will be called. The surprise decision came after Euro Zone finance ministers had said they were in favor of granting Greece a two-month extension for its bailout program.
  • Avoiding a government shutdown, the House of Representatives passed a $1.1 trillion federal spending bill that will fund every federal agency through September except the Department of Homeland Security. Passing by a vote of 219-206, the bill which included a rollback of some of the Dodd-Frank banking reforms, will now head to the Senate for approval.

Markets

  • Equity markets floundered this week, having their worst week in two and a half years. The S&P fell 3.51% and closed at 2,002. Likewise, the Dow Jones moved down 3.78% and closed at 17,280. Year to date, the S&P is up 10.42% and the Dow Jones is up 6.57%
  • Yields in the Treasury markets moved lower this week amidst the weakness in the equity markets. The 10 year Treasury bond now yields 2.09% and the 5 year Treasury bond yields 1.52%.
  • The spot price of WTI Crude Oil plunged again this week, reaching a new 52 week low. Prices fell 12.36%, closing at $57.55 per barrel. Year to date, Oil prices are down 37.45%.
  • The spot price of Gold increased this week, gaining 2.76% and closing at $1,223.50 per ounce. Year to date, Gold prices are up 1.87%.

Economic Data

  • Initial jobless claims fell from last week, coming in at 294,000 vs. consensus estimates of 297,000. The Labor Department noted no special factors affecting the report, although the holiday season is traditionally more volatile. The four week moving average for claims now stands at 299,000.
  • Headline retail sales rose 0.7% in November vs. expectations of 0.4%. The positive report could have been aided by a colder November pushing forward apparel sales which were up 1.2% in the month. Lower gas prices may have also served to push retail sales up for the month.

Fact of the Week

  • The price of a barrel of oil fell from $145.31 on 7/3/2008 to $30.28 on 12/23/2008, which represented a 79% drop over 173 days. The price of a barrel of oil has fallen from $107.48 on 6/20/2014 to a $57.55 close on 12/12/2014, representing a 46% drop over 175 days.

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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