Wealth Management Economic Update November 9, 2015

U.S. and World News

  • taiwan_000050798696_320Marking the first talks between the neighbor nations in almost 70 years, the presidents of China (Xi Jinping) and Taiwan (Ma Ying-jeou) will meet in Singapore this weekend. This historic meeting between the two nations is viewed as a breakthrough in the relationship that has been tense since the end of the Chinese civil war in 1949. The two leaders are set to discuss topics such as the Taiwan presidential elections and potential unification.
  • China announced it will lift a four month ban on new stock listings after it has improved relevant policies aimed on making their equity markets operate more efficiently. The ban on IPOs had been imposed in early July following a dramatic decline in the country’s stock market.
  • Greece’s parliament has approved a bill containing the reforms that had been prescribed by the country’s international creditors. This comes ahead of a meeting of Eurozone finance ministers at which they will decide if Greece qualifies for new bailout funds. This was a crucial step for the country towards receiving those funds; however there are still issues that could hold up unlocking them.

Markets

  • Equity markets continued to advance upwards this week. The S&P 500 ended the week up 1.01%, closing at 2,099. Similarly, the Dow Jones increased 1.47% and closed at 17,910. Year to date, the S&P is up 3.74% and the Dow has gained 2.53%.
  • Yields in the Treasury markets moved substantially higher following the much better than expected jobs report that seems to have increased the probability of a December rate increase by the Federal Reserve. The 10 year Treasury bond now yields 2.33% while the 5 year Treasury bond now yields 1.74%.
  • The spot price of WTI Crude Oil fell this week. Prices decreased by 4.44% closing at $44.52 per barrel. In 2015, WTI Oil prices are down 25.11%.
  • The spot price of Gold decreased this week, losing 4.58% and closing at $1,089.80 per ounce. Year to date, gold prices are down 7.98%.

Economic Data

  • Initial jobless claims came in at 276,000 which was an increase from the prior week’s figure of 260,000. 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 263,000.
  • The October employment report was better than expected, showing nonfarm payrolls growing by 271,000 which was significantly better than the consensus expectation of 185,000. August and September’s figures were revised up by a total of 12,000 jobs, bringing the three month average of job gains to 187,000.
    • The headline unemployment rate fell from 5.1% to 5.0%, in-line with forecasts. The labor force participation rate was unchanged in October at 62.4%.
    • Average hourly earnings surprised to the upside, showing an increase of 0.4% in October, bringing the year over year growth to 2.5%.

Fact of the Week

  • According to the Boston College Center on Wealth and Philanthropy, heirs of decedents are projected to inherit $36 trillion (after the payment of estate taxes) through the year 2061.

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.

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