- The Treasury Department will delay penalties for large employers who fail to provide workers with health insurance. The requirements were initially scheduled to begin when the bulk of the law takes effect at the start of next year, but the administration will now wait until 2015 before enforcing mandatory employer and insurer reporting guidelines. The delay comes after businesses inundated the department with questions regarding the 2,700 page healthcare overhaul that continues to struggle getting off the ground.
- Political unrest has sprung up in Egypt again as Egypt’s army removed President Mohammed Morsi and appointed Adly Mansour. Mr. Mansour is a judge who had been named head of the Supreme Constitutional Court on Monday. International leaders expressed concerns about the democratic future of the largest country in the Arab world.
- Conflict has also arisen in Portugal as many are protesting austerity measures in the economically troubled country. Finance Minister Vitor Gaspar resigned amid pressure on Monday and many other high level political officials appear ready to follow him out the door.
- Croatia has become the 28th member of the European Union after over a decade of working to fulfill the membership requirements. With the country’s economy in recession, large amounts of debt and high unemployment, Croatia has a lot in common with much of the EU already.
- Stock markets posted strong gains as the S&P 500 Index rose 1.16%, closing at 1631.89. The Dow Jones Industrial Average was up 0.74% to close at 15135. After this week’s bounce, the S&P and the Dow respectively are up 14.42% and 15.50% year to date.
- Treasury yields soured higher this week after a better than expected employment report fueled speculation that the Fed would begin to taper asset purchases this year. The 5 year and 10 year treasury finished the week at 1.60% and 2.73% respectively.
- The unrest in Egypt is having an effect on the oil markets, sending prices higher. While the country isn’t an oil producer, it controls the Suez Canal which is one of the world’s most important shipping lanes. The spot price of WTI Crude Oil rose this week, increasing by 7.1%, closing at $103.40 per barrel. Year to date, oil is up 10.3%.
- The spot price of Gold fell this week, dropping by 1.0% and closing at $1222.10/ounce. Gold is now down 27.1% this year.
- Weekly Initial Jobless Claims fell this week as claims decreased by 3,000 and came in in-line with expectations at 343,000. The 4-week moving average of jobless claims remained at 346,000.
- Monthly non-farm payrolls exceeded expectations posting an increase of 195,000 payrolls for June vs. an increase of 165,000 payrolls economists projected. The unemployment rate was 7.6%. Revisions for April and May added 70,000 jobs to the employment counts.
Fact of the Week
- The estimated Social Security shortfall today (present value) between the future taxes anticipated being collected and the future benefits expected to be paid out in the next 75 years is $9.6 trillion. This entire deficit could be eliminated by either an immediate 2.66% increase in the Social Security payroll tax rate (ie. From 12.40% to 15.06%) or an immediate 16.5% reduction in Social Security benefits that are paid out.
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