Brexit: Wealth Economic Update Mar. 31, 2017

U.S. and World News

  • london360The Brexit process has officially begun as British Prime Minister Theresa May has invoked Article 50 of the Lisbon Treaty, formally informing the European Union of its exit from the bloc. The letter of declaration was hand-delivered to EU President Donald Tusk Wednesday and now begins what is estimated to be a two year negotiation process between the UK and all of the remaining 27 European Union member states. This is anticipated to be a difficult and lengthy procedure as agreements must be reached on tough issues such as trade and immigration.
  • Complicating matters in the United Kingdom is the fact that Scottish lawmakers voted 69-59 this week to seek a new referendum on independence within the next two years. This certainly comes as an unwelcome distraction from the Brexit proceedings for British leaders. First Minister of Scotland Nicola Sturgeon declared, “The mandate for a referendum is beyond question, and it would be democratically indefensible – and utterly unsustainable – to attempt to stand in the way of it.”

Markets

  • Markets closed the 1st quarter of 2017 on an up note. The S&P 500 gained 0.82% and closed at 2,363. The Dow Jones was also positive for the week rising 0.32% and closing at 20,597. Year to date, the S&P is up 6.06% and the Dow is up 5.18%.
  • Interest rates continued to decline a bit this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.92% and 2.39%, respectively.
  • The spot price of WTI Crude Oil rose 5.82% this week, closing at $50.76 per barrel. Year to date, Oil prices have fallen 5.51%.
  • The spot price of Gold increased by 0.38% this week, closing at $1,248.24 per ounce. Year to date, Gold prices are up 8.77%.

Economic Data

  • Initial jobless claims declined by 3,000 from last week, coming in at 258,000. The level of claims was likely affected for a second week by Winter Storm Stella. The four week moving average for claims rose to 254,000.
  • 4th Quarter GDP growth was revised up in the 3rd estimate from +1.9% to +2.1%, beating expectations of +2.0%. The main source of the upward revision was real consumer spending, which was revised up to +3.5% from +3.0% previously.
  • The Case-Schiller home price index rose by 0.9% in its latest reading, beating expectations of a 0.7% increase. Prices rose in all 20 cities measured except for Cleveland, with Seattle (+1.7%) and Chicago (+1.3%) seeing the largest increases in the month. Over the last 12 months, home prices as measured by the index have risen 5.7%.
  • The PCE index (measure of inflation) rose 0.1% in February, in line with consensus expectations. Over the last 12 months, PCE inflation has increased 2.1%, also in line with estimates.
    • Core PCE (excludes food and energy, Fed’s preferred inflation measure) rose 0.2% in February, meeting expectations. Over the last year, Core PCE has risen 1.75%, still below the Fed’s 2% inflation target.

Fact of the Week

  • 25 players will make the opening day rosters of the 30 Major League Baseball teams ahead of the season opening on Sunday night, a total of 750 big league ballplayers. Coming into this season, there have been a total of 18,593 men to appear in at least 1 game at the major league level. (Source: Major League Baseball)

PLAY BALL!!

 

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.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s