Yellen, ISIS-Germany: Wealth Economic Update Dec. 27, 2016

U.S. and World News

  • baltimore-184943883_360After the Federal Reserve raised interest rates for the first time in a year, Fed Chairwoman Janet Yellen spoke in Baltimore about the economy, specifically regarding the job market and wages. In her speech, she told 2016 University of Baltimore graduates that they are “entering the strongest U.S. jobs market in nearly a decade” as the U.S. unemployment rate sits at 4.6%, its lowest level since 2007. Janet Yellen did not speak to anything relating to monetary policy, but did mention that wages continue to increase despite low economic growth.
  • ISIS has claimed responsibility for a man by the name of Anis Amri, who intentionally drove a truck through a crowded Christmas market in Berlin killing 12 and injuring 50 people. Chancellor Angela Merkel is being criticized for her security policies after it was discovered that in the past, Anis Amri was secretly under surveillance and considered a threat by German officials but the operation was later called off. Anis Amri was killed during a shoot-out with police in Milan early this morning.

Markets

  • This week the S&P 500 rose by 0.29% and closed at 2,264. The Dow Jones increased by 0.46% and closed at 19,934. So far in 2016, the S&P is up 12.96% and the Dow is up 17.14%.
  • Interest rates retreated from their highs this week. The 5 year and 10 year U.S. Treasury Notes now yield 2.02% and 2.54%, respectively.
  • The spot price of WTI Crude Oil rose by 0.21% this week and closed at $53.06 per barrel. WTI Crude is up 43.25% in 2016.
  • The spot price of Gold declined 0.26% this week, closing at $1,131.88 per ounce. Year to date, gold prices are up 6.67%.

Economic Data

  • Existing home sales rose by 0.7% (mom) in November versus expectations of a 1.8% decline. Single-family home sales fell by 0.4% and sales of condos rose 10%.
  • Sales of new single-family homes increased 5.2% (mom) in November. New home sales were the highest in the Midwest and West, and lower in the South.
  • Personal income remained unchanged in November versus expectations of a slight increase. Nominal wage, salary incomes, and real disposable personal income were down 0.1% (mom). Consumer spending increased 0.2% and the personal saving rate dropped to 5.5% from 5.7%.

Fact of the Week

  • Healthcare spending in the United States reached $3.2 trillion in 2015 (18% of the nation’s economy), equal to per person spending of $9,990. 20 years earlier (1995), per person healthcare spending in America was $3,788 (source: Health Affairs).

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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