Budget, Govt Shutdown, Wall: Wealth Economic Update Dec. 31, 2018

U.S. and World News

  • wall-813556790The U.S. federal government will remain closed until after the new year as negotiations over a budget deal have made no progress. According to the Department of Agriculture, the new $12 billion trade aid relief package that includes government payments to farmers will be temporarily suspended as the federal shutdown continues. Also, some economic data figures normally published by the U.S. Commerce Department will not be published during this time. Negotiations for a budget deal remain at a standstill as President Trump refuses to budge on a deal without border security funding, while Democrats continue to strongly oppose funding a wall. Democrats will assume control of the House on January 3rd and have discussed plans for a budget deal, however, none of these plans include $5 billion for a border wall.


Markets

  • Stocks rebounded sharply this week after last week’s declines. The S&P 500 rose 2.89% and closed at 2,486. The Dow Jones jumped 2.75% and closed at 23,062. Year to date, the S&P is down 5.02% and the Dow Jones is down 4.39%.
  • Yields continued their declines this week. The 5 year and 10 year U.S. Treasury Notes are yielding 2.56% and 2.72%, respectively.
  • The spot price of WTI Crude Oil fell further this week. Prices fell 1.12% and closed at $45.08 per barrel. Year to date, Oil prices are down 25.00%.
  • The spot price of Gold rose 1.76% this week and closed at $1,279.07 per ounce. Year to date, Gold prices are down 1.82%.

Economic Data

  • Initial jobless claims decreased by 1,000 to 216,000 for the week ended December 22nd from an upwardly revised 217,000. The four-week moving average of claims fell by 5,000 to 218,000. Claims rose by 4,000 in New Jersey and by 2,000 in California but fell by 2,000 in Michigan and Texas.
  • The Conference Board index of consumer confidence fell 8.3 points to 128.1 in December versus expectations for a reading of 133.5.
  • The FHFA house price index rose by 0.3% in October, in-line with expectations. The year-over-year rate declined to 5.7% from 6.1%.
  • Pending home sales fell by 0.7% in November, versus expectations for a 1.0% increase.

Fact of the Week

  •  On Wednesday, the Dow Jones Industrial Average closed up 1086 points, a daily change of 4.98%. While it was the largest one day return in terms of points, it doesn’t even rank in the top 20 all time of daily percentage gains for the Dow Jones.

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
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Ed Gorenz – (630) 906-5467 ejgorenz@oldsecond.com
Mike Demski – (630) 966-2430 mdemski@oldsecond.com
Mike Cava – (630) 281-4522 mcava@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC nor any govt agency; not a deposit of, or guaranteed by, the bank; may lose value.

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