U.S. and World News
- Greek banks finally reopened this week following the country’s deal with the European Central Bank and International Monetary Fund, although extensive capital controls still remain in place. Prime Minister Alexis Tsipras has successfully passed two reform packages through a combative parliament that were necessary in order for the bailout deal to commence. Meanwhile, ratings agency Standard and Poor’s lifted its credit rating on Greece from CCC- to CCC+.
- The U.S. and Cuba have formally restored diplomatic relations that have been severed for more than five decades by re-establishing embassies in each other’s capitals. While many European officials have been visiting Cuba seeking business deals, American companies are still prohibited from conducting trade with the country and travelling there from the U.S. as a tourist remains illegal.
- Opposite of last week, equity markets tumbled this week. The S&P 500 fell 2.21%, closing at 2,080. Likewise, the Dow Jones dropped 2.86% and closed at 17,569. Year to date, the S&P is up 1.01% and the Dow is down 1.43%.
- Yields in the Treasury markets dipped a little this week. The 10 year Treasury bond now yields 2.26% and the 5 year Treasury bond yields 1.62%.
- The spot price of WTI Crude Oil plummeted this week. Prices were down 6.13% and closed at $48.07 per barrel. In 2015, WTI Oil prices are down 16.40%.
- Once again, the spot price of Gold fell decreasing by 3.09% and closing at $1,099.11 per ounce. Year to date, gold prices are down 7.20%.
- Initial jobless claims showed a steep decline to 255,000 which was a decrease from the prior week’s figure of 281,000. This is the lowest level of jobless claims since November 1973. However, the Labor Department noted that there may be seasonal factors such as summer auto plant shutdowns that may have affected the claims figure. The four week moving average for claims now stands at 279,000.
- Existing home sales rose 3.2% in June, beating expectations of 0.9%. Both single-family (+2.8%) and condo/co-op (+6.6%) sales increased. Geographically, sales increased in all four regions of the country.
Fact of the Week
- The United States’ debt service ratio (debt payments and financial obligations as a percentage of disposable personal income) was 9.92% in the 1st quarter of 2015, down from 13.17% in the 4th quarter of 2007. This statistic has been tracked since 1980 and until the 4th quarter of 2012, the ratio had never been reported under 10%. (Source: Federal Reserve).
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