U.S. and World News
- Brexit was at the center of attention this week as Secretary David Davis and junior Brexit ministers Steve Baker and Suella Braverman have stepped down. The resignations are a result of opposition to Theresa May’s new “soft Brexit” strategy and pose a threat to Theresa May’s ability to gain the backing of parliament as nine months remain before Britain leaves the European Union. The way in which Great Britain will separate from the European Union is to be agreed upon given two strong sided beliefs; one side believes in more freedom from the European Union while the other side wishes to remain closer to the European Union to minimize the risk of damage to the economy. Jeremy Hunt has been appointed as U.K. foreign secretary, a supporter of the “soft Brexit” strategy. President Trump expressed concern that Theresa May’s Brexit strategy may not lead to a free trade deal with the United States.
- Earlier this week, the United States announced that it would put in place an additional 10% tariff on $200 billion of Chinese goods. China called the move “completely unacceptable” and plans to retaliate. Meanwhile, China’s monthly trade surplus with the United States rose to a record $28.97 billion, underlying the existing problems on trade with China.
- Stocks continued their upward path this week. The S&P 500 increased by 1.55% and closed at 2,801. The Dow Jones rose 2.31% and closed at 25,019. Year to date, the S&P is up 5.82% and the Dow Jones is up 2.39%.
- Yields were unchanged for the week. The 5 year and 10 year U.S. Treasury Notes are yielding 2.72% and 2.82%, respectively.
- The spot price of WTI Crude Oil fell this week, losing 4.21% and closing at $70.69 per barrel. Year to date, Oil prices are up 17.60%.
- The spot price of Gold decreased 1.11% this week, closing at $1,241.50 per ounce. Year to date, Gold prices are down 4.71%.
- Initial jobless claims fell by 18,000 to 214,000 this week. The four-week moving average of claims moved down by 2,000 to 223,000. Jobless claims fell by 4,000 in Kentucky and rose by 2,000 in Oregon.
- The consumer price index (CPI) rose 0.13% month-over-month in June versus expectations of a 0.2% increase. The lower than expected figure reflects lower energy prices. The year-over-year rate of core inflation rose 0.1% to 2.3%.
- Import prices fell 0.4% in June month-over-month missing expectations of a 0.1% increase. The decline reflected a drop in food and beverage prices.
- The University of Michigan’s index of consumer sentiment fell by 1.1 points to 97.1 in the July preliminary report versus expectations of 98.0.
- The producer price index rose 0.3% in May versus expectations of a 0.2% increase. The rise reflects higher energy prices and higher retailer margins.
Fact of the Week
- The cost of renting a 26-foot moving truck for a 1-way trip from San Jose, CA to Las Vegas, NV is $1,990 for a July 2018 trip. The cost associated with a trip from Las Vegas to San Jose (the reverse trip) over the same time period is $174. The price disparity is due to a shortage of moving trucks in California caused by an exodus of California residents to other states. (Source: U-Haul)
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