Wealth Management Economic Update April 11, 2016

U.S. and World News

  • papers_000071022187_320Details from the Panama Papers, 11.5 million documents leaked from Panama-based law firm Mossack Fonseca, have been causing a stir across the globe with details of corporations and wealthy individuals utilizing offshore shell companies in order to hide funds from authorities. The first casualty from the bombshell documents was Iceland’s Prime Minister, David Gunnlaugsson, who resigned after the leak revealed his wife’s ownership of a shell company set up in the British Virgin Islands. Several other high profile people and world leaders are named in the documents, including President Macri of Argentina, President Poroshenko of Ukraine, King Salman of Saudi Arabia and soccer star Lionel Messi. In the wake of the Panama Papers leak, the U.S. Treasury Department announced that it finally intends to issue a long-delayed rule forcing banks to seek the identities of people behind these types of shell-company accounts.
  • Minutes released from the March Federal Reserve meeting were in line with the post-meeting statement and Janet Yellen’s most recent public remarks. Policymakers saw downside risks to growth stemming from developments overseas and in the credit markets. Several members also expressed concern about low inflation both in the U.S. and abroad and deemed that a more cautious approach to interest rate policy was warranted.
  • Puerto Rico Governor Alejandro Garcia Padilla has signed an emergency bill allowing the government to stop debt payments until January 2017. The action throws the current restructuring plans for the U.S. territory into doubt. Creditors claim that the moratorium on debt payments violates prior agreements as well as the island’s constitution. The action buys the Padilla administration some time and increases pressure on Congress to help Puerto Rico find a way out of its $72 billion in debt.

Markets

  • Markets slumped a bit as the 2nd quarter of 2016 kicked off. The S&P 500 fell 1.15% and closed at 2,048. Likewise, the Dow Jones dropped 1.15% and closed at 17,577. So far in 2016, the S&P is up 0.78% and the Dow is up 1.58%.
  • Interest rates continued to fall this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.15% and 1.72%, respectively.
  • The spot price of WTI Crude Oil rose 7.45% this week to close at $39.53 per barrel. WTI Crude is down 1.13% in 2016.
  • The spot price of Gold increased 1.44% this week, closing at $1,240.14 per ounce. Year to date, gold prices are up 16.87%.

Economic Data

  • Initial jobless claims came in at 267,000 which was a decrease from last week’s reading of 276,000. The Labor Department noted no special factors in the data. The four week moving average for claims moved up to 267,000.

Fact of the Week

  • For every 100 American workers, there are 24 retired Americans age 65 or older. By contrast, for every 100 European workers, there are 42 retired Europeans age 65 or older. (Source: European Commission)

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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