Wealth Management Economic Update September 14, 2015

U.S. and World News

  • Japanese Prime Minister Shinzo Abe*

    Japanese Prime Minister Shinzo Abe*

    Japanese Prime Minister Shinzo Abe has won a rare second three-year term as the President of his ruling party. Representing a rare period of stability in Japan’s often turbulent political arena, the news was welcomed with a rally by the Japanese stock market. Abe has pledged several initiatives in an effort to spur growth in the country, including cutting corporate tax rates from 35% down into the 20%’s.

  • In another effort to battle its slowing economy, China’s finance ministry announced another stimulus measure this week. The government will cut taxes for small businesses and allocate more funds for infrastructure projects, including two railway projects worth almost 70 billion yuan ($11 billion).

Markets

  • Equity markets stabilized this week ahead of the Federal Reserve meeting next Wednesday and Thursday. The S&P 500 ended the week up 2.10%, closing at 1,961. Similarly, the Dow Jones rose 2.10% and closed at 16,433. Year to date, the S&P is down 3.38% and the Dow is down 6.15%.
  • Yields in the Treasury markets generally rose this week. The 10 year Treasury bond now yields 2.19% while the 5 year Treasury bond now yields 1.51%.
  • The spot price of WTI Crude Oil declined in another volatile week. Prices fell by 2.85%, closing at $44.74 per barrel. In 2015, WTI Oil prices are down 23.03%.
  • The spot price of Gold declined this week, falling 1.27% and closing at $1,107.65 per ounce. Year to date, gold prices are down 6.48%.

Economic Data

  • Initial jobless claims came in at 275,000 which was a decrease from the prior week’s figure of 282,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 275,750.
  • The University of Michigan’s consumer sentiment index showed a decline in the preliminary September report from 91.9 in August to 85.7. The decline was a reflection of deterioration in consumers’ assessment of current conditions and for future expectations, most likely due to recently falling stock prices and market volatility.

Fact of the Week

  • According to the Federal Reserve, a $1 bill has an average life of only 22 months. Meanwhile, $5, $10 and $20 bills have average lives of 2, 3 and 4 years respectively. $50 and $100 bills both have life expectancies of 9 years. Finally, the Fed says that coins typically circulate for 30 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

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.

*Image of Japanese Prime Minister Shinzo Abe. Author: 多摩に暇人. License: GNU Free Documentation License, also filed under Creative Commons Attribution-Share Alike 3.0 Unported, 2.5 Generic, 2.0 Generic and 1.0 Generic license. (See, https://commons.wikimedia.org/wiki/File:Shinzo_Abe.jpg).

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