U.S. and World News
- Pro-Moscow separatists have declared victory in a referendum on “self-rule” for the “People’s Republic of Donetsk” in eastern Ukraine, saying that 89% of voters have approved the measure. Russia said it “respects” the results of the ballot, which should be implemented “in a civilized manner.” However, the Ukraine government, the U.S. and the EU have condemned the ballot as illegal. The fear is that if Donetsk does try to implement the poll outcome, Ukraine will slide into civil war.
- Saudi Arabia could increase oil production if the tension between Russia and Ukraine causes market shortages, Saudi Oil Minister Ali al-Naimi said today. Absent of any crude shortages, al-Naimi doesn’t expect OPEC to increase its output cap of 30M barrels a day when it meets next month. He also described $100 a barrel as a fair price “for everybody – consumer, producer and oil companies.”
- Narendra Modi’s opposition Bharatiya Janata Party looks to have won India’s biggest election victory in thirty years. At the time of writing, counting showed that the BJP and its allies were ahead in 336 out of 542 seats in the lower house of parliament, well above the 272 needed for a majority. India’s Sensex stock index was +0.9% – although down sharply from earlier highs – on the prospect of a stable government that’s perceived as business friendly and committed to economic reform.
- The S&P 500 declined by 0.03% for the week, closing at 1,878.The Dow Jones also fell this week by 0.55% closing at 16,491. So far in 2014, the S&P is up 1.60% and the Dow Jones is down 0.51%.
- Treasury yields declined this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.55% and 2.52%, respectively.
- The spot price of WTI Crude Oil ended the week up 2.15%, closing at $102.14 per barrel. Year to date, Oil prices have climbed 5.00%.
- The spot price of Gold increased by 0.31% this week, closing at $1292.93 per ounce. Year to date, Gold prices are up 7.60%.
- Jobless claims dropped to 297,000 (vs. consensus 320,000) from an upwardly-revised 321,000 in the prior week. The Labor Department cited no special factors in the data. The four-week moving average of initial claims edged down to 323,000.
- Headline consumer prices rose 0.3% in April, in line with consensus expectations. Core consumer prices rose 0.24% on an unrounded basis (vs. consensus +0.1%), somewhat higher than our view. Over the past year, headline consumer prices rose 2.0% and core prices rose 1.8%, bringing inflation numbers closer to the Fed’s stated targets.
Fact of the Week
- Bill Gates is ranked # 1 as the richest American today ($72 billion), but the 6 living heirs of Sam Walton (who died in 1992) are worth a combined $145 billion (source: Forbes).
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