Outlook June 30, 2016

TO LEAVE OR NOT TO LEAVE

That was the question answered by the United Kingdom in an historic referendum vote to leave the European Union. The 52% to 48% vote to “Leave” was a shock to the markets which had heavily priced in a “Remain” vote in the days leading up to it. A rise in populist sentiment against the trade and importantly the lax immigration policies enforced upon the U.K. by the European Union were the foundations of the “Brexit” movement. Upon the announcement of the voting results, extreme volatility returned to the markets after what had been a slow grind higher during the second quarter. Global stock markets cratered, interest rates dropped and currencies fluctuated wildly, following a steep drop in the British Pound (£). Equity markets quickly regained their post-Brexit losses, however, interest rates remained at their very low levels reflecting a flight to safety.

So where does the UK go from here? While it isn’t likely that elected officials would go against the will of the public, the referendum itself is not legally binding. It will be up to Parliament to invoke ‘Article 50’, which would begin the separation process. Former Prime Minister David Cameron announced his resignation, leaving the task of leading negotiations with each of the European Union nations to establish new trade agreements to the new Prime Minister Theresa May. These negotiations may take more than two years to complete. From the market’s perspective, the fact that the U.K. did not adopt the Eurodollar (€) currency is a positive. Untangling a country from a shared currency and instituting its own is a much taller task than what the U.K. and Europe are faced with now. Therefore, it is widely believed that E.U. officials will fiercely negotiate the terms of the U.K.’s exit in order to discourage other member countries from following Britain’s lead.

Markets & Economic Data

The S&P 500 earned 2.5% in the second quarter, similar to the Dow Jones 2.1% return, while the NASDAQ lagged and was -0.2%. The MSCI EAFE index was down -1.5% in the quarter, while emerging markets continued to outperform their developed counterparts in 2016 by posting a 0.8% gain (MSCI Emerging Markets Index). One theme that has continued to play out over the course of the year is investors’ hunt for yield as it simply is not available in the fixed income markets without delving into the risky high yield sector. As of June 30th, the 5 year U.S. Treasury yielded 1.00% and the 10 year yielded 1.47%.

Value stocks, in particular high dividend paying stocks, greatly outperformed their growth counterparts. Low and falling interest rates around the globe are causing investors to turn their sights to other sources of income, driving the highest yielding sectors of the stock market to lofty valuations. We believe this to be another effect of the negative interest rate policy (NIRP) adopted by the European Central Bank and the Bank of Japan. Over 30% of the world’s sovereign debt traded at a negative interest rate as of June 30. The ramifications of this NIRP experiment are still unknown although the policy has yet to bear fruit in the way of increased inflation or productivity.

Market Indicies (Total Return as of 6/30/2016)
2ndQ% YTD% 1-Year% 3-Year%* 5-Year%*
S&P 500 2.5 3.8 4.0 11.6 12.1
Dow Jones 2.1 4.3 4.5 9.0 10.4
NASDAQ (0.2) (2.6) (1.6) 13.9 13.3
Russell 2000 3.8 2.2 (6.8) 7.1 8.3
MSCI EAFE** (1.5) (4.4) (10.2) 2.1 1.7
MSCI Emerging Markets** 0.8 6.5 (11.8) (1.2) (3.5)
Source: Bloomberg Finance L.P; *Annualized; **USD

U.S. economic data has been a mixed bag and is generally supportive of slow but steady growth. Manufacturing remains a weakness, though activity picked up in the second quarter. Housing data continues to improve (benefitted by low mortgage rates), evidenced by an increasing number of home sales and prices which have risen 5.4% over the last 12 months as measured by the Case-Shiller home price index. Monthly employment reports have been choppy but the three-month average of 147,000 jobs created and the 2.6% annualized growth in wages are indicative of a still improving labor market. In addition, the more timely weekly jobless claims figures remain at low levels indicating that people who are looking for work are finding jobs. Corporate earnings are lackluster but may be poised to improve fueled by energy companies coming out of the downturn. In addition, the pause in the strengthening of the U.S. dollar should benefit U.S. multinational companies’ earnings.

Continuing to Watch Central Banks & Overseas Developments

For the time being, Janet Yellen and the Federal Reserve are on hold for increasing interest rates and it is clear that the Committee’s projection of four hikes this year made at the beginning of 2016 was far too ambitious. Adding to the confusion of market participants are the mixed messages that the members of the FOMC are sending by way of their public statements that seemingly contradict each other. In particular, St. Louis Fed President James Bullard’s abrupt shift from ‘hawk’ to ‘dove’, now favoring only one interest rate increase over the next three years after weeks earlier publicly supporting multiple hikes this year and next. Against the backdrop of slow global growth and increased uncertainty due to Brexit and the upcoming U.S. Presidential elections, we believe that the Federal Reserve will be hard pressed to justify more than one rate increase in 2016.

International central banks remain accommodative as their economies are in a continued state of low to no growth. The European Central Bank announced additional easing and is now including corporate bonds in its asset purchases, pushing the borrowing costs for some European firms to nearly 0%. Japan decided that its economy was too fragile and further delayed a sales tax increase; an action that Prime Minister Shinzo Abe had repeatedly said would only happen in the case of a major economic shock or earthquake. China mostly stayed out of the headlines and appears on track for a ‘soft landing’ with projections of around 5% growth in 2016.

The Wealth Management officers at Old Second work with clients to craft investment strategies that fit their objectives of growth and income. Particularly in volatile markets, ensuring that clients’ exposure to risk is appropriate for their situation is of the utmost importance. Challenges in the markets must be met with diligence and care. Our team of experienced professionals is available to help guide you along the path toward achieving your financial goals.

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.

UK Vote: Wealth Economic Update June 27, 2016

U.S. and World News

  • london_big-ben_49186880_340The United Kingdom has voted to Leave the European Union in the historic Brexit vote held on Thursday. For more information on this event, please see the special Brexit update here.
  • Acting Brazilian President Michel Temer has authorized a payment of $850 million from the federal government to the state of Rio de Janeiro, which is struggling with a fiscal crisis less than two months before the Olympic Games are slated to begin. This is in addition to fears about the Zika virus and other major public health concerns leading up to the Olympics. Rio declared a state of financial emergency last week as a result of deteriorating finances, which have forced deep cuts to services like education, healthcare and policing.
  • Just a week before $2 billion in bond payments come due, Puerto Rico’s governor Alejandro Garcia Padilla reiterated that the island will default on its general obligations even if services are cut off. Padilla is currently in Washington lobbying for Congressional approval of a bill that would establish the framework for Puerto Rico to restructure its $70 billion in debt.

Markets

  • Equity markets rallied early in the week before dropping dramatically after the results of the Brexit Referendum. The S&P 500 was down -1.62% for the week and closed at 2037. The Dow Jones dropped 1.55% and closed at 17,400. So far in 2016, the S&P is up 0.74% and the Dow is up 1.18%.
  • Interest rates moved lower again this week following the Brexit vote. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.07% and 1.56%, respectively.
  • The spot price of WTI Crude Oil lost 2.04% this week to close at $47.57 per barrel. WTI Crude is up 13.59% in 2016.
  • The spot price of Gold gained 1.32% this week, closing at $1,315.75 per ounce. Year to date, gold prices are up 24.00%.

Economic Data

  • Initial jobless claims came in at 259,000 which was a decrease from last week’s reading of 277,000. The Labor Department noted no special factors in the data. The four week moving average for claims moved down to 267,000.
  • Existing home sales increased by 1.8% in May, which was in line with consensus and reached a new post-crisis high. Single family home sales rose 1.9% in the month, while multi-family sales increased 1.6%. By region, existing home sales rose in the Northeast (+4.1%), South (+4.6%) and West (+5.4%), but fell in the Midwest (-6.5%).

Fact of the Week

  • During the 25 years from 1991 to 2015, the average interest rate on a 10 year US Treasury note was 4.7%. As of close on Friday June 24th, the 10 year US Treasury note had a yield of 1.56%. (Source: Treasury Department)

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.

 

Brexit: Special Wealth Management Economic Update June 24, 2016

brexit_graphThe United Kingdom has spoken and its decision is for the nation to Leave the European Union. With all of the votes counted in the Brexit referendum, ‘Leave’ was victorious over ‘Remain’ by a margin of 52% to 48%. The result was a surprise to book makers and financial markets, both of which had heavily priced in a status quo result. Equity markets are sharply negative this morning, particularly overseas, and currency markets are quite volatile as they attempt to digest the surprising outcome.

UK Voters have had issues with the trade and particularly the immigration policies that had been imposed by the European Union for quite some time. The populistic belief that they had ‘lost their country’ to immigrants was the overriding reason for the ‘Leave’ vote. In response, Prime Minister David Cameron announced that he would resign and a replacement would be selected by October.

So what now? It should be noted that this will not be a fast process for the U.K. to leave. There is a two year negotiation period in order to establish new trade deals with the remaining EU members, all of which require parliamentary approval. The vote may also lead to other independence votes by other disgruntled EU members down the line, though EU officials will try to suppress these movements by making the terms of the UK’s exit as unattractive as possible. The longer term economic impact on the UK and Europe in general is up for debate, with many believing that all parties will be better off for the split, however short term volatility will likely continue as the details are worked out.

We at Old Second Wealth Management focus on long term investing, and market volatility such as this often presents opportunity to invest at depressed prices. If you have any questions or concerns, please do not hesitate to reach out to your Old Second Relationship Manager or Investment Officer.

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.

 

How to Navigate the Wealth Management Milestones in Your Life

Jacqueline Runnberg, CFP®

Jacqueline Runnberg, CFP®Everyone travels a different path through their financial life. But like any well-traveled road, there are milestones along the way. Here are the common life events you are likely to pass through—along with a few roadblocks and detours—and a checklist of what you should be considering as you reach each one.

First Job

  • Understand employee benefits and employer-sponsored (especially tax-advantaged) savings opportunities for health care expenses, retirement and student loan repayment
  • Create a will and set up powers of attorney

Career Changes

  • Review the impact a change will have on your insurance coverage
  • Rollover your retirement account to keep savings on track and tax deferred

How to Navigate the Wealth Management Milestones in Your LifeRelationship Commitments

  • Talk about money with your life partner—different attitudes can be reconciled but not if they are unknown to one another
  • Know each other’s debt load and credit scores
  • Determine how your assets and income will be pooled together, saved and spent
  • Decide the best way to obtain health insurance coverage
  • Review your named beneficiaries on your employee benefits and in your will and power-of-attorney documents

Home Ownership

  • Buy what you need, not the maximum you can afford—it’s likely going to be your biggest asset

Side Trips
These events can require that you immediately revisit your portfolio allocation, named beneficiaries, and state and local laws affecting personal property, liability and estate settlement:
➢ Moving to a new state
➢ Starting a business
➢ Receiving an inheritance

Children

  • Review your budget for different spending needs
  • Initiate saving for future expenses
  • Revisit your will or trust documents and be sure to name a guardian
  • Start saving for college

Detours
To avoid unintended consequences, update documents that name beneficiaries and those for insurance coverage with these events:
➢ Divorce
➢ Unemployment

Retirement Planning

  • Determine what retirement means to you
  • Periodically reassess and gauge your progress
  • Plan for healthcare expenses
  • Understand your options and benefits under Social Security

Estate Planning

  • Consider that having more assets require more tax planning to ensure efficiency
  • Take into account beneficiary considerations
  • Preserve wealth as it grows and the process becomes more complex
  • Plan for your legacy

Roadblocks
Be prepared to reroute for:
➢ Illness or disability
➢ Changes in laws

Retirement

  • Test income plan before fully retiring
  • Determine the best withdrawal strategy for your circumstances

We’ve helped many generations of financial travelers plan for their journey and for any side trips, detours or roadblocks they might encounter along the way. Give us a call to meet with a wealth management representative today. We’ll help you determine the best route for realizing your financial goals.

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

Wealth Management Economic Update June 20, 2016

U.S. and World News

  • brexit_93801255_340Britain faces a critical vote on June 23rd to determine whether or not the nation will remain in the European Union. Momentum for the ‘Leave’ camp has been building in recent weeks which has added to volatility in the financial and currency markets. Adding to matters, a prominent member of the British Parliament and strong supporter a ‘Remain’, Jo Cox, was murdered this week by a pro-Brexit individual. Many analysts believe this act may sway voters more towards a ‘Remain’ choice.
  • The Federal Reserve chose to leave interest rates where they were during their policy meeting this week. It was a unanimous decision with no dissents. Referencing the weak May employment report, the Committee noted that the “pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up.” The Committee members are starting to change their expectations to better match the market as now six of its officials are now projecting only one rate hike in 2016.

Markets

  • Equity markets were lower this week. The S&P 500 was down -1.12% for the week and closed at 2071. The Dow Jones dropped 1.00% and closed at 17,675. So far in 2016, the S&P is up 2.38% and the Dow is up 2.76%.
  • Interest rates moved lower again this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.11% and 1.61%, respectively.
  • The spot price of WTI Crude Oil shed 1.92% this week to close at $48.13 per barrel. WTI Crude is up 16.45% in 2016.
  • The spot price of Gold gained 1.92% this week, closing at $1,298.65 per ounce. Year to date, gold prices are up 22.39%.

Economic Data

  • Initial jobless claims came in at 277,000 which was an increase from last week’s reading of 264,000. The Labor Department noted no special factors in the data. The four week moving average for claims moved down to 269,000.
  • The headline Consumer Price Index (measure of inflation) increased by 0.2% in May, boosted by higher energy prices (+1.2%). Over the last 12 months, CPI has risen a paltry 1.0%, mostly reflecting the prior decrease in energy prices.
  • Core CPI (excludes food and energy prices) also rose 0.2% in May. This brings the one year increase in core prices to 2.2%.
  • Retail sales increased by 0.5% in May, partially benefitting from higher gas station sales. Motor vehicle sales also gained 0.5% during the month.

Fact of the Week

  • The number of internet capable electronic devices (ie. laptops, smart phones, cars, watches, etc) surpassed the world’s population in 2010. By 2020, the number of ‘connected’ devices will reach 50 billion or more than 6 times the current world population of 7.3 billion. (Source: Federal Trade 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
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.

 

Wealth Management Economic Update June 13, 2016

U.S. and World News

  • Saudi Arabia has approved a plan to reduce public spending and to generate income without depending on oil. The plan is expected to boost non-crude revenues to $141 billion by 2020, create 450,000 non-government jobs, and help fund a large part of production of goods and services worth $72 billion.
  • The U.S. House of Representatives has passed legislation that will assist Puerto Rico with its debt crisis ahead of a $1.9 billion debt payment that it may not be able to pay. The bill consists of the U.S. putting a federal control board in charge of managing the restructuring of Puerto Rico’s $70 billion in debt. The bill now requires the Senate’s approval and will be started in the next few weeks.
  • zurich_switzerland_340A proposal to introduce a guaranteed basic income for every person living in Switzerland has been rejected by the country. Only 23.1% of the voters were for the proposal with the argument that a monthly income of 2,500 Swiss francs per citizen would promote dignity and public service, while 76.9% were against it saying that it would cost too much and cause damage to the economy.

Markets

  • Equity markets were flat again this week. The S&P 500 was down 0.15% for the week and closed at 2096. The Dow Jones dipped 0.33% and closed at 17,865. So far in 2016, the S&P is up 2.55% and the Dow is up 2.53%.
  • Interest rates moved lower further this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.17% and 1.64%, respectively.
  • The spot price of WTI Crude Oil gained 0.66% this week to close at $48.98 per barrel. WTI Crude is up 18.44% in 2016.
  • The spot price of Gold gained 2.43% this week, closing at $1,274.43 per ounce. Year to date, gold prices are up 20.10%.

Economic Data

  • Initial jobless claims came in at 264,000 which was a decrease from last week’s reading of 267,000 reaching a post crisis low. The Labor Department noted no special factors in the data. The four week moving average for claims moved down to 270,000.
  • The University of Michigan’s index of consumer sentiment dropped to 94.3 from 94.7 in the June preliminary release which was in line with consumer expectations.
    •  Consumer sentiment remains new post-crisis highs, despite the negative jobs report last week.

Fact of the Week

  • Of the 10 largest cities in the United States, only Chicago has seen its population decline since the year 2000. 8 of the 10 largest cities have experienced population gains of at least +100,000, growth that only the cities of Chicago and Philadelphia were unable to achieve. (Source: Census Bureau).

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.

 

3 Reasons You Need a Will Today

Andy Roche, MBA, CPA, CFP®

June_andy_roche_portraitIf you don’t have a will, you’re not alone. Approximately 55 percent of Americans have yet to prepare this essential document.[1] It’s understandable: No one wants to spend a lot of time planning for when they are no longer around.

But as valid as the reason for avoidance is, every adult, regardless of age, should have a will. Here’s why.

Reason 1: It’s Not About You

Though a will is the legal expression of your last wishes, it’s really not about you so much as the people you care about. These are the people who will have to carry on…without you…and without directions on what to do with your financial and personal assets if you don’t leave a will.

When you don’t have a will, decisions like who receives your property and in what amounts are determined by state law. The matter can take months, and even years, to sort out if there are challenges by potential heirs. It can also lead to unintended consequences. For instance, parents or siblings you’ve been estranged from for years could end up inheriting your property rather than your fiancé or life partner.

Even if the state laws lead to the same distribution you would have preferred, the uncertainty can cause disagreements among your survivors. These can then result in lengthy and emotionally exhausting divisions over who was promised what and make holidays a minefield of hurt feelings and misunderstanding for years to come.

Reason 2: Unclear Future for Your Children

Arrangements for the care and custody of underage children are also covered within wills. State law and state welfare agencies can quickly get involved and undermine your intentions. For instance, custody could end up reverting to an ex-spouse despite your remarriage or bypass a life partner and send your children to live with a grandparent, or even foster care.

Reason 3: Undermining Your Legacy

For many, causes and support for community initiatives or organizations are important elements in their lives. Without a will, these causes may be left without your support—personal and financial.

Don’t Be That Person

As intimidating as it is to think about your last wishes, the process can be fairly simple, especially when you are younger and have a less complicated financial life.

Online legal advice services provide ready access to immediate, do-it-yourself options. But to ensure your assets are properly titled and your wishes accounted for, a family law attorney may be a better alternative.

If named as your executor or trustee, Old Second will enact your documents when the time comes. It’s an option that can spare your family from the responsibility and the time involved in settling an estate. Talk to any of our wealth management representatives about these services or if you need help creating a list of questions and considerations to discuss with your attorney. We can also review a draft of your documents once they are prepared and answer any additional questions that may have come up since your first meeting with your attorney.

 

[1] A.L. Kennedy, “Statistics on Last Wills & Testaments,” legalzoom.com, retrieved 5/21/16.

Wealth Management Economic Update June 6, 2016

U.S. and World News

  • vienna_austria_340OPEC ministers met in Vienna, Austria this week to discuss the state of the world’s oil markets. The cartel of the largest oil producers failed to reach an agreement on setting output targets, a result that was widely expected. Saudi Arabia remains a supporter for setting output targets among the member nations; however, Iran is strongly against it as the country recently had restrictions lifted that allowed their re-entry into the oil markets.
  • As expected, the European Central Bank did not announce any new easing measures during its conference this week. The ECB has already increased stimulus twice since December, so the committee opted to hold off on any new measures for now. The previously announced step of the central bank purchasing corporate bonds is slated to begin next week.
  • Japanese Prime Minister Shinzo Abe announced the postponement of increasing the country’s sales tax from 8% to 10% amid continued tepid economic growth. The tax increase will be delayed for a second time until 2019 and marks a big reversal in Abe’s stance on the matter as he had repeatedly said that only an economic shock on the scale of the Lehman Brothers collapse or a major earthquake would cause another delay. Abe also said that he will announce a new stimulus package in the fall, further complicating Japan’s efforts to reign in the largest debt burden in the world and has led some economists to become concerned that Japan’s debt rating may be downgraded.

Markets

  • Equity markets were mostly flat during this holiday shortened week. The S&P 500 was Unchanged for the week and closed at 2099. The Dow Jones dipped 0.30% and closed at 17,807. So far in 2016, the S&P is up 3.65% and the Dow is up 3.42%.
  • Interest rates moved sharply lower on the weaker than expected jobs report, pushing back expectations of the Federal Reserve increasing interest rates. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.23% and 1.70%, respectively.
  • The spot price of WTI Crude Oil lost 1.11% this week to close at $48.78 per barrel. WTI Crude is up 18.03% in 2016.
  • The spot price of Gold gained 2.67% this week, closing at $1,244.69 per ounce. Year to date, gold prices are up 17.30%.

Economic Data

  • Initial jobless claims came in at 267,000 which was a decrease from last week’s reading of 268,000. The Labor Department noted no special factors in the data. The four week moving average for claims moved down to 277,000.
  • The May non-farm employment report showed a weak 38,000 jobs added during the month, well below estimates of 160,000. Some of the miss in the figure can be attributed to the 37,000 job decline in the telecommunications industry due to a major strike at Verizon. However, the weakness spread further than that category. The prior two months’ figures were revised down a total of 59,000, making the three month average for job gains 116,000.
    • The headline unemployment rate declined from 5.0% to 4.7%, a larger decline than the estimated 4.9%. However, most of this improvement in the headline figure was due to a 0.2% decrease in the labor force participation rate to 62.6%.
    • Average hourly earnings increased by 0.2%, bringing the 12-month increase in wages to 2.5%.
  • The Case-Shiller home price index rose 0.9% in March, slightly beating estimates of 0.8%. Only 1 of the 20 cities making up the index saw price declines during the month. Over the last 12 months, home prices as measured by the index have risen 5.4%.
  • The headline PCE (measure of inflation), rose by 0.3% during April, reflecting a rise in energy costs. Meanwhile, Core PCE (excludes food & energy, preferred measure of inflation by the Federal Reserve) was a bit weaker, gaining 0.17%. Over the last 12 months, headline prices measured by PCE have risen 1.1%, while core prices have risen 1.6%.

Fact of the Week

  • Per a poll by Gallup, only 68% of Americans at least age 65 and 44% of all American adults have executed a will or trust.

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.