Wealth Management Economic Update April 25, 2016

U.S. and World News

  • Looking to stave off impeachment proceedings, Brazilian President Dilma Rousseff will travel to the United Nations in New York to rally international support around her. While there, Rousseff will attempt to frame the recent votes by the Brazilian congress to move forward with impeachment as a coup. If the Senate in Brazil votes by simple majority in early May to continue with impeachment, Rousseff will be suspended from her post and replaced by VP Michel Temer. Prior to Rousseff, four of Brazil’s eight presidents since 1950 have failed to serve out their terms, with one impeachment, one resignation, one suicide and one military overthrow.
  • argentina_congress340Argentina has officially returned to the global bond markets following a 15 year hiatus. The country unveiled the biggest sovereign debt issuance by an emerging market nation in 20 years. The country is selling $15 billion in bonds yielding between 6.5% – 8%, however demand was strong, attracting orders worth $65 billion. Most of the cash raised will go toward paying off creditors from Argentina’s previous default, the reason for the 15 year hiatus.

Markets

  • Equity markets continued to climb higher this week. The S&P 500 gained 0.53% and closed at 2,092. Likewise, the Dow Jones rose 0.62% and closed at 18,004. So far in 2016, the S&P is up 3.02% and the Dow is up 4.16%.
  • Interest rates turned higher this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.36% and 1.89%, respectively.
  • The spot price of WTI Crude Oil rose 8.33% this week to close at $43.72 per barrel. This, despite an OPEC summit in Doha, Qatar last weekend that yielded no change in policy.  WTI Crude is up 9.36% in 2016.
  • The spot price of Gold was virtually unchanged this week, closing at $1,233.61 per ounce. Year to date, gold prices are up 16.26%.

Economic Data

  • Initial jobless claims came in at 247,000 which was a decrease from last week’s reading of 253,000. The Labor Department noted no special factors in the data. This was the lowest level of initial claims since 1973. The four week moving average for claims moved down to 261,000.
  • Housing starts declined by -8.8% in March, worse than expectations of a -1.1% decline. Single family starts declined -9.2% and multifamily starts fell by -7.9%.
  • Existing home sales increased 5.1% in March, beating expectations of 3.9%. The gain marks a big bounce back from the -7.3% decline in February.

Fact of the Week

  • 25 years ago, 89% of American workers expected to be retired by at least age 65. Today, only 57% of American workers expect to be retired by 65. (Source: Employee Benefit Research Institute)

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
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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