Wealth Management Economic Update April 27, 2015

U.S. and World News

  • coin_Greek_320Greece’s self-imposed April 24th deadline has passed with the country refusing to present a detailed list of economic reforms to Eurozone finance ministers in order to unlock €7.2 billion in aid Greece desperately needs to pay their creditors. The deadline has been kicked down the road again and now appears as though June will be when Greece would truly run out of liquidity and default on its debt if the aid is not received.
  • Following China’s weaker than expected GDP data last week; the country’s central bank cut the reserve requirement ratio for all banks by 1% to 18.5%. This adds more liquidity to the world’s second largest economy in an effort to combat slowing growth, which was still +7.0% in the 1st quarter.

Markets

  • Equity markets rose this week on broadly better than expected earnings reports. The S&P 500 gained 1.76%, closing at an All-Time High of 2,118, while the Dow Jones increased by 1.42% and closed at 18,080. Year to date, the S&P is up 3.46% and the Dow is up 2.10%.
  • Yields in the Treasury market rose moderately this week. The 10 year Treasury bond now yields 1.91% and the 5 year Treasury bond yields 1.32%.
  • The spot price of WTI Crude Oil rose this week, gaining 2.02% and closing at $57.18 per barrel. In 2015, WTI Oil prices are now up 2.75%.
  • The spot price of Gold dipped by 2.07% this week and closed at $1,179.35 per ounce. Year to date, gold prices are down 0.42%.

Economic Data

  • Initial jobless claims rose from last week, coming in at 295,000, a bit higher than consensus expectations. The Labor Department noted that no special factors affected claims this week. The four week moving average for claims now stands at 284,500.
  • Existing home sales rose 6.1% in March, beating consensus estimates of 3.1%. Single family home sales were up 5.5%, while condo and co-op sales rose 11.1%. Although this is a bit of a lagging housing indicator, after some recent soft data, this is a welcome development.

Fact of the Week

  • According to the Commerce Department, the average growth rate of the US economy (as measured by gross domestic product) over the last 75 years (1940-2014) has been 3.6% per year. However, U.S. GDP growth has reached 3.6% or greater in only 1 of the last 14 calendar years.

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®, CFP® – (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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