Trump, Brexit: Wealth Economic Update Jan. 20, 2017

U.S. and World News

  • president_podiumDonald J. Trump was inaugurated as the 45th President of the United States on Friday morning. His inauguration address stressed the importance of putting America first in all aspects including business and defense. The address was filled with promises of a more prosperous and safer country. While no specifics were given in his speech, President Trump guaranteed that the status quo of Washington D.C. would be shaken up and change was on the horizon.
  • This week British Prime Minister Theresa May laid out more plans for the coming Brexit, saying that the country will not seek a deal that leaves it “half in, half out” of the European Union. This confirmed fears of a “hard Brexit” in which the nation would leave the EU’s single market and regain full control of Britain’s borders. Also, in a speech at the World Economic Forum in Davos, May vowed that, “The U.K. will step up to a new leadership role as the strongest and most forceful advocate for free markets and free trade anywhere in the world.”

Markets

  • This week the S&P 500 dipped modestly by 0.13%, closing at 2,271. The Dow Jones Industrial Average decreased by 0.24% and closed at 19,827.
  • Interest rates rose a bit this week. The 5 year and 10 year U.S. Treasury Notes now yield 1.94% and 2.47%, respectively.
  • The spot price of WTI Crude Oil declined by 0.20% this week and closed at $52.42 per barrel.
  • The spot price of Gold increased by 1.08% this week, closing at $1,210.32 per ounce.

Economic Data

  • Weekly initial jobless claims came in at 235,000, a decrease from last week’s reading of 247,000. The Labor Department noted no major distortions to the data this week. The four week moving average for jobless claims now stands at 247,000 which is the lowest since 1973.
  • The Consumer Price Index (measure of inflation) rose 0.3% in December which was in line with expectations. The headline figure was boosted by a 1.5% rise in energy prices and have now risen 2.1% over the last 12 months.

o   The Core Consumer Price Index (excludes food and energy) rose by 0.2%, also in line with forecasts. Over the last year, core inflation stands at 2.2%.

  • Housing starts increased by 11.3% in December, bouncing back following a large decline in November. The rebound was solely in the multi-family category which increased by 57.3% in the month. Single family starts actually saw another decline in December, falling by 4.0%.

Fact of the Week

  • President Obama leaves office having presided over one of the best stock market return environments in American history. Since his inauguration in January 2009, the S&P 500 gained 182% or an annualized return of 16.3%. Since 1928, those market returns were only surpassed by the presidency of Bill Clinton (15.2% annualized return). (Source: Wall Street Journal)

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

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