French Election, Brexit: Wealth Economic Update Apr. 21, 2017

U.S. and World News

  • france360France will be holding what is presumed to be the 1st round of its Presidential Election on Sunday. The current four top candidates in the polling are only separated by 4% points, making the race extremely tight. Under French election rules, if no candidate secures a majority (which seems all but a certainty), the two highest vote-getters will square off in a run-off election scheduled for May 7th. The four candidates include two broadly pro-market, liberal reformers (Emmanuel Macron and Francois Fillon) and two populist eurosceptics who promise labor market and trade protectionism (Marine Le Pen and Jean-Luc Melenchon). Macron and Fillon have put greater focus on domestic issues like tax reform, unemployment and the national debt. Meanwhile, both Le Pen and Melenchon focused on immigration control and have proposed taking France out of the European Union with Le Pen being more staunchly opposed to France remaining in the euro. Global markets will be watching the results of this election closely.
  • British Prime Minister Theresa May has called a snap general election in the U.K., with the vote to be held on June 8th. With her Conservative party holding a sizeable lead in polls, May is taking the opportunity to try to gain a significant majority as Brexit negotiations get underway. May said that the vote was necessary to secure a mandate going into a “moment of enormous national significance”, also stating that Westminster was currently too dividend to take on this task.


  • Markets rebounded a bit this week. The S&P 500 rose 0.87% and closed at 2,349. The Dow Jones gained 0.51% for the week and closed at 20,548. Year to date, the S&P is up 5.54% and the Dow is up 4.71%.
  • Interest rates ended the week where they began and remain at low levels. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.77% and 2.24%, respectively.
  • The spot price of WTI Crude Oil dropped 6.86% this week, closing at $49.58 per barrel. Year to date, Oil prices have fallen 7.80%.
  • The spot price of Gold was little changed this week, closing at $1,284.72 per ounce. Year to date, Gold prices are up 11.96%.

 Economic Data

  • Initial jobless claims rose by 10,000 from last week, coming in at 244,000. The Labor Department noted no special factors affecting the data this week. The four week moving average for claims dropped to 243,000.
  • Housing starts declined -6.8% in March which was a larger drop than the expected -3.0%. The report was broadly weak with both the single-family category (-6.2%) and the multi-family category (-7.9%) seeing declines.
  • Existing home sales rebounded in March, increasing 4.4% vs. forecasts of 2.2%. This marks a full retracement of February’s -3.9% drop. Both sales of existing single family units (4.3%) and condos/co-ops (5.0%) rose during the month. On a regional level, existing home sales increased in the Northeast (10.1%), Midwest (9.2%) and South (3.4%) but declined in the West (-1.6%).

Fact of the Week

  • Of U.S. metropolitan areas with populations of at least 1 million, Salt Lake City has the lowest unemployment rate at 3.0% and Cleveland has the highest at 6.6%. The nationwide unemployment rate current stands at 4.5%. (Source: Department of Labor)

Please contact a member of the Wealth Management Department if you have any questions about this information.

Rich Gartelmann CFP® – (630) 844-5730
Steve Meves, CFA® – (630) 801-2217 –
Brad Johnson CFA®, CFP® – (630) 906-5545
Joel Binder, SVP – (630) 844-6767
Jacqueline Runnberg CFP® – (630) 966-2462
Ed Gorenz, VP – (630) 906-5467

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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