U.S. and World News
- Britain faces a critical vote on June 23rd to determine whether or not the nation will remain in the European Union. Momentum for the ‘Leave’ camp has been building in recent weeks which has added to volatility in the financial and currency markets. Adding to matters, a prominent member of the British Parliament and strong supporter a ‘Remain’, Jo Cox, was murdered this week by a pro-Brexit individual. Many analysts believe this act may sway voters more towards a ‘Remain’ choice.
- The Federal Reserve chose to leave interest rates where they were during their policy meeting this week. It was a unanimous decision with no dissents. Referencing the weak May employment report, the Committee noted that the “pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up.” The Committee members are starting to change their expectations to better match the market as now six of its officials are now projecting only one rate hike in 2016.
- Equity markets were lower this week. The S&P 500 was down -1.12% for the week and closed at 2071. The Dow Jones dropped 1.00% and closed at 17,675. So far in 2016, the S&P is up 2.38% and the Dow is up 2.76%.
- Interest rates moved lower again this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.11% and 1.61%, respectively.
- The spot price of WTI Crude Oil shed 1.92% this week to close at $48.13 per barrel. WTI Crude is up 16.45% in 2016.
- The spot price of Gold gained 1.92% this week, closing at $1,298.65 per ounce. Year to date, gold prices are up 22.39%.
- Initial jobless claims came in at 277,000 which was an increase from last week’s reading of 264,000. The Labor Department noted no special factors in the data. The four week moving average for claims moved down to 269,000.
- The headline Consumer Price Index (measure of inflation) increased by 0.2% in May, boosted by higher energy prices (+1.2%). Over the last 12 months, CPI has risen a paltry 1.0%, mostly reflecting the prior decrease in energy prices.
- Core CPI (excludes food and energy prices) also rose 0.2% in May. This brings the one year increase in core prices to 2.2%.
- Retail sales increased by 0.5% in May, partially benefitting from higher gas station sales. Motor vehicle sales also gained 0.5% during the month.
Fact of the Week
- The number of internet capable electronic devices (ie. laptops, smart phones, cars, watches, etc) surpassed the world’s population in 2010. By 2020, the number of ‘connected’ devices will reach 50 billion or more than 6 times the current world population of 7.3 billion. (Source: Federal Trade Commission)
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