- The race to replace Ben Bernanke as Fed chief when his term runs up at the end of the year looks increasing to be down to current Fed governor Janet Yellen and former Clinton administration Treasury Secretary Larry Summers. This revelation comes as a surprise as Yellen has been regarded as the front runner for the position and Summers isn’t very well liked in Washington D.C. circles.
- U.S Bankruptcy Judge Steven Rhodes held hearings this week regarding whether to allow the Detroit bankruptcy to proceed amid lawsuits filed by workers, unions and pension funds seeking to halt proceedings in order to protect obligations they have been promised. Judge Rhodes ruled that the city at large would suffer irreparable harm if its bankruptcy were to be delayed and struck down the lawsuits. Bankruptcy proceedings will now move forward in federal court without getting slowed down by law suits filed in state court.
- Stock markets were flat this week as the S&P 500 Index was unchanged, closing at 1692. The Dow Jones Industrial Average was up 0.1% to close at 15,559. The S&P and the Dow respectively are up 18.61% and 18.73% year to date.
- Treasury yields rose a bit this week with the 5 year and 10 year treasury finishing at 1.37% and 2.57% respectively. Interest rates continue to be quite volatile and are swinging on nearly every comment about the Fed tapering their asset purchases.
- The spot price of WTI Crude Oil fell this week by 3.0%, ending a nearly month long rally, and closed at $104.68 per barrel. Year to date, oil is up 11.7%.
- The spot price of Gold continued to recover this week, rising by 2.9% and closing at $1,333.18/ounce. Despite the gains, gold is still down 20.4% this year.
- Weekly Initial Jobless Claims rose this week, increasing by 9,000 and came in at 343,000 vs. expectations of 340,000. However, the Labor Department continues to note that seasonality factors may have distorted the data. The 4-week moving average of jobless claims moved down to 345,000.
- Second quarter earnings announcements continued this week with a large amount of companies reporting. With 265 of the S&P 500 firms having reported, 69% have exceeded earnings estimates with financial stocks boasting the biggest beats. Top line revenue numbers have been somewhat subpar as many industries are struggling to boost sales amid sluggish demand.
- Over 306,000 of the 1.2 million delinquent homeowners who have received loan modifications under the Home Affordable Modification Program (HAMP) since it was introduced in 2009 have re-defaulted. An audit of the program showed that the cost to the taxpayer has been $815 million.
Fact of the Week
- According to the Federal Reserve Bank of New York, 33% of all the outstanding student loans nationwide are held by Americans 40 years of age or older.
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