Rates, Emails, Cubs: Wealth Economic Update Nov. 7, 2016

U.S. and World News

  • On Wednesday, the Fed decided not to make any interest rate changes, nor did they make it clear that there would be a rate increase next month. However, in the post-meeting statements they did cite that the case for an increase “continued to strengthen”. The market currently is strongly anticipating a rate increase in December.
  • email_34506084_360FBI Director James Comey announced that potentially incriminating emails were discovered on ex-Democratic Congressman Anthony Weiner’s laptop. Federal investigators issued a search warrant to investigate all emails related to Hillary Clinton’s private email server. This has caused the polls to come very close going into the election Tuesday. Subsequent to his original letter to Congress stating the FBI would examine the emails, Mr. Comey announced “Based on our review, we have not changed our conclusions that we expressed in July with respect to Secretary Clinton.”

Markets                     

  • This week the S&P 500 dropped 1.89% and closed at 2,085. The Dow Jones fell 1.47% and closed at 17,888. So far in 2016, the S&P is up 3.88% and the Dow is up 4.91%.
  • Interest rates decreased this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.23% and 1.78%, respectively.
  • The spot price of WTI Crude Oil was down 9.49% this week to close at $44.11 per barrel. WTI Crude is up 19.10% in 2016.
  • The spot price of Gold rose 2.31% this week, closing at $1,304.91 per ounce. Year to date, gold prices are up 22.98%.

Economic Data

  • Initial jobless claims came in at 265,000, an increase from last week’s reading of 258,000. The Labor Department noted that the increase was mostly from Missouri and Kentucky where there has been temporary auto plant shutdowns. The four week moving average for claims moved up to 258,000.
  • The U.S. added 161,000 jobs during the month of October which was slightly less than expected and previous months were revised up. The unemployment rate moved to 4.9% from 5%. The average hourly earnings rate rose 0.4% which was slightly more than expected and the year-over-year rate is now at 2.8% which is a new cyclical high.
  • The PCE price index increased 0.21% month-over-month and 1.2% year-over-year which was in line with estimates.
  • The ISM manufacturing index increased to 51.9 in October which was slightly better than expectations. The ISM report indicates that the domestic manufacturing sector continues to expand at a moderate pace.

Fact of the Week

  • The Chicago Cubs have won the World Series for the first time since October of 1908 when:
    • Only 46 states existed
    • The Ford Model T was just invented
    • Wrigley Field had not yet been built
    • The FBI was established
  • Wednesday night, Dexter Fowler was the first player ever to hit a leadoff home run in a game 7 World Series game

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
Steve Meves, CFA® – (630) 801-2217 – smeves@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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