U.S. and World News
The impeachment process for Brazilian President Dilma Rousseff has begun this week with the selection of a special committee that will handle the first phase of the investigation. The selection of the committee went poorly for the President, as Brazil’s Congress chose representatives that were opposed by Rouseff’s supporters. Rousseff is being accused of tampering with the national budget to illegally disguise poor fiscal performance and a growing budget gap.
- In an attempt to help Puerto Rico avoid a bond default on January 1st, the U.S. Senate has introduced a bill to extend assistance to the island. However, the proposal stopped well short of giving the U.S. Commonwealth access to bankruptcy court, a measure that has been speculated on recently. The proposed measures would cut employee payroll taxes and extend as much as $3 billion in funding to the island, which is dealing with over $72 billion in debt and a 45% poverty rate.
- Markets fell sharply this week as the price of oil continued to fall. The S&P 500 lost 3.76% and closed at 2,012. The Dow Jones followed suit by falling 3.20% and closing at 17,265. Year to date, the S&P is down 0.25% and the Dow is down 0.69%.
- Interest rates rose a bit this week and the 5 year and 10 year U.S. Treasury Notes are now yielding 1.55% and 2.12%, respectively.
- The spot price of WTI Crude Oil plunged by 11.53% this week, closing at a 52-week low of $35.36 per barrel. Year to date, Oil prices are down 41.04%.
- The spot price of Gold decreased by 1.07% this week, closing at $1,074.77 per ounce. Year to date, Gold prices are down 9.25%.
- Initial jobless claims came in at 282,000 which was an increase from last week’s reading of 269,000. The Labor Department noted no special factors in the data. The four week moving average for claims now stands at 270,750.
- The University of Michigan consumer sentiment index rose in the first December estimate to a reading of 91.8 from 91.3 in November. Consumers’ assessment of current economic conditions rose, however expectations for the future worsened.
- Headline retail sales increased by 0.2% in November, below consensus expectations of 0.3%. Core retail sales, which go into the official GDP calculation, rose by a larger than expected 0.6%. There were solid gains seen in sales of electronics, apparel and food service expenditures. However, sales at gas stations continued to fall, reflecting the continued decline in gas prices.
Fact of the Week
- According to a new Pew Research Center report, middle class Americans now comprise less than half (49.9%) of the nation’s population, down from 61% in 1971. For the report, middle class was defined as households earning between 67% and 200% of the overall median income in the U.S. after adjusting for household size. For example, a family of three would be categorized as middle class if its total annual income ranged from $42,000 to $126,000.
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*Image of Brazilian President Dilma Rousseff. Photo credit: Agencia Brasil, via Wikimedia Commons. License: Creative Commons Attribution 3.0 Brazil License. (See, https://commons.wikimedia.org/wiki/File:Santos_and_Rouseff.jpg).