U.S. and World News
- Speaker of the House John Boehner announced that he will resign from Congress at the end of October. Boehner faces the choice between avoiding a government shutdown by partnering with Democrats to pass a budget, which reportedly would lead to disgruntled Republicans bringing up a vote for his removal, or repeat 2013 by allowing a shutdown to take place with the hope of a quick resolution. With the first option apparently being the preferred route, Boehner chose to preemptively announce his resignation instead of risking a divisive vote on his fate. It’s widely believed that Boehner’s resignation significantly reduces the odds of a shutdown next week and that House Majority Leader Kevin McCarthy will become the new Speaker of the House.
- Chinese President Xi Jinping made a historic trip to the United States this week, meeting with President Obama and other senior officials to discuss a number of matters affecting the two nations. Chief among them, it was announced that both leaders have reached a ‘common understanding’ on steps to end cyber spying and attacks between the two countries. Jinping and Obama also unveiled a deal to build on an emissions agreement struck last year which outlined new steps China will take to slash their greenhouse gas emissions.
- Greek voters re-elected Prime Minister Alexis Tsipras and his left-wing Syriza party despite many citizens being enraged about Tsipras breaking an election pledge and ignoring the outcome of a referendum. Tsipras received 35% of the vote, while the New Democracy party’s Vangelis Meimarakis got 28%.
- Equity markets were volatile yet again this week, posting losses across most indices. The S&P 500 ended the week down 1.35%, closing at 1931. Similarly, the Dow Jones declined 0.43% and closed at 16,315. Year to date, the S&P is down 4.77% and the Dow is down 6.79%.
- Yields in the Treasury markets rose modestly this week. The 10 year Treasury bond now yields 2.17% while the 5 year Treasury bond now yields 1.48%.
- The spot price of WTI Crude Oil increased slightly in another volatile week. Prices rose by 1.00%, closing at $45.47 per barrel. In 2015, WTI Oil prices are down 22.66%.
- The spot price of Gold increased this week, rising 0.56% and closing at $1,145.65 per ounce. Year to date, gold prices are down 3.27%.
- Initial jobless claims came in at 267,000 which was a slight increase from the prior week’s figure of 264,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 271,750.
- New home sales increased by 5.7% month over month in August. This follows a revised up gain of 12.0% in July. New home sales have reached the highest level since February 2008. Three of the report’s four regions showed home sales increasing with the exception being the Midwest.
- Existing home sales declined 4.8% in August, disappointing against consensus estimates of -1.6%. Sales of both single-family homes (-5.3%) and condos/co-ops (-1.6%) showed declines.
Fact of the Week
- A survey conducted by Pew Research Center in 2014 found that 85% of Americans believe they are in the ‘middle class’ as opposed to being in the ‘lower class’ or ‘upper class’.
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