U.S. and World News
- Following the resounding vote of No against a set of austerity measures put for by Greece’s international creditors in exchange for an additional bailout, the fate of Greece’s status in the Euro currency hangs in the balance. After the vote, former Finance Minister Yanis Varousfakis resigned and has been succeeded by Euclid Tsakalotos. Emergency meetings have been held this week between Greece and high ranking European Union officials and Prime Minister Alexis Tsipras has submitted an application for a new three-year bailout deal. The deal includes many of the reforms requested by creditors in the deal that was voted down in the July 5th referendum so there is optimism a deal will be reached. Meanwhile, Greek banks and markets will remain closed through July 13th as negotiations continue.
- The Chinese government has stepped in to try to stop the plunge that the country’s stock markets have been seeing the last few weeks. After rallying over 100% over the last nine months, shares have fallen over 30% from their highs, wiping out about $2.7 trillion in market value since June 12th. Encouraged by the government, China’s largest brokerage firms have pledge to buy 120 billion yuan ($19.3 billion) of shares to try to prop up the market. After that measure failed to stop the bleeding, nearly half of all Chinese listed companies have had trading in their shares suspended and short selling has been banned for the remaining trading equities.
- The head of Puerto Rico’s Government Development Bank, Melba Acosta, said that the country is not intending to cut principal payments to bondholders and would instead seek to renegotiate debt terms. Banking officials have scheduled a meeting for Monday, the first since Governor Alejandro Garcia Padilla rattled markets last week saying he wanted to restructure debt and postpone bond payments. Several U.S. politicians, including Hillary Clinton, have begun calling for changes in U.S. bankruptcy laws that would allow for the commonwealth to restructure its obligations.
- Minutes from the June Federal Reserve meeting were mostly in line with expectations and continued the dovish tone the Committee has expressed at recent meetings. Fed officials made note of international developments on several occasions, particularly Greece and China. Nine of ten voting members said they needed more evidence that “economic growth was sufficiently strong and labor market conditions had firmed enough to return inflation to the Committee’s longer-run objective over the medium term.”
- Despite all the excitement from the NYSE closing for 3.5 hours on Wednesday this week, there was little change in the equity markets for week. The S&P 500 fell slightly by 0.01%, closing at 2,077. The Dow Jones gained 0.17% and closed at 17,760. Year to date, the S&P is up 0.86% and the Dow is down 0.35%.
- Similar to the equity markets, yields in the Treasury markets exhibited little volatility for the week. The 10 year Treasury bond now yields 2.40% and the 5 year Treasury bond yields 1.66%.
- Once again, the spot price of WTI Crude Oil fell dramatically this week by 7.18%, closing at $52.84 per barrel. In 2015, WTI Oil prices are down 7.09%.
- The spot price of Gold somewhat decreased this week by 0.42% and closed at $1,163.74 per ounce. Year to date, gold prices are down 1.74%.
- Initial jobless claims came in at 297,000 which was an increase from the prior figure of 281,000 and above consensus expectations of 275,000. The Labor Department noted that no special factors affected claims this week, though during this time of year there can be seasonal adjustments related to auto plant shutdowns. The four week moving average for claims now stands at 279,500.
Fact of the Week
- As of December 2013, 73% of retired workers who were receiving Social Security benefit payments had begun taking their benefits early, before attaining their full retirement age.
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