U.S. and World News
- Reports indicate that Greece is attempting to get an extension of the country’s bailout program through March 2016 in order to break the current impasse over reforms and austerity measures. With the current bailout set to run out on June 30, Greece would get access to nearly €11 billion in aid that was originally set aside to prop up Greek banks in order to remain solvent over the proposed extension period. Greek officials hope to reach a deal with its lenders at a Eurogroup meeting on June 18th as time is running out for the country to fend off a looming default.
- A deadly outbreak of Middle East Respiratory Syndrome (MERS) forced South Korea’s central bank to cut interest rates this week after authorities reported more new cases of the virus that first turned up in the country on May 20. There have been at least 122 cases of the virus reported and nine related deaths. The 0.25% interest rate cut to a record-low 1.5% is the country’s 4th cut in the last year. Central bankers hope to stave off any negative impact that the virus may have on South Korea’s economy.
- Equity markets finished slightly positive after a bit of a volatile week. The S&P 500 gained 0.12%, closing at 2,094. Similarly, the Dow Jones rose by 0.35% and closed at 17,899. Year to date, the S&P is up 2.68% and the Dow is up 1.61%.
- Yields in the Treasury markets were volatile but ended the week mostly unchanged. The 10 year Treasury bond now yields 2.40% and the 5 year Treasury bond yields 1.74%.
- The spot price of WTI Crude Oil rose 1.56% from last week, closing at $60.05 per barrel. In 2015, WTI Oil prices are now up 6.74%.
- The spot price of Gold increased this week by 0.81% and closed at $1,181.38 per ounce. Year to date, gold prices are down 0.25%.
- Initial jobless claims rose a bit from last week and remain quite low, coming in at 279,000, above consensus expectations of 275,000. The Labor Department noted that no special factors affected claims this week. The four week moving average for claims now stands at 278,750.
- Headline retail sales rose 1.2% in May which was in line with consensus expectations. This was aided by a 3.7% sales increase at gas stations on higher selling prices and a 2.0% increase in auto sales. Core retail sales (used to measure consumer spending in the GDP report) rose 0.7%, beating estimates of 0.5%. Here, gains of 1.5% in apparel sales and 1.4% in non-store retail sales were responsible for the upside surprise.
- The University of Michigan consumer sentiment survey improved in June to a reading of 94.6 up from 90.7 in May. The survey showed that both the assessment of current conditions and for future expectations both had solid increases for the month. Expected change in income during the next year reached a post-recession high of +2.2%.
Fact of the Week
- According to the Department of Labor, over the 10 year period ending 4/30/15, broad national inflation measured by the Consumer Price Index has increased by 1.97% per year. Over that same period, the cost of medical care has increased at a nearly 70% greater pace, rising 3.34% per year.
Please contact a member of the Wealth Management Department if you have any questions about this information.
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