U.S. and World News
- The European Union granted Theresa May an extension for the deadline to leave until October 31st during an emergency summit in Brussels on Wednesday. Some say, that her days are numbered as Prime Minister of the U.K as attempts to leave the European Union with a deal has been a circus. JPMorgan economist Malcolm Barr stated that “A six-month period is clearly enough for the Conservative party to contemplate a change in leadership while still allowing some time for the incoming PM to seek to negotiate with the EU”. The remaining possible scenarios are “No Brexit”, Theresa May’s deal is approved and she resigns from office, the deal fails again and an election is called, or perhaps the worst scenario, there is a “No-deal Brexit”. Goldman Sachs currently has a 10 percent probability of a no-deal Brexit.
- As the conclusion of the trade war between the United States and China nears, the Trump administration is beginning to start another one with the European Union. U.S. Trade Representative Robert Lighthizer is calling for action over a case involving European Union subsidies to Airbus that the World Trade Organization has discovered causes “adverse effects” to U.S. products. The case has been in litigation for 14 years and has caused $11.2 billion in damage to U.S. trade. The United States is set to begin trade talks with the European Commission, who will conduct negotiations on behalf of the 28 EU member countries. Trade negotiations will begin after official approval from EU ministers is given on Monday.
- The stock rally continued this week with the exception of the Dow Jones. The S&P 500 rose 0.56% and closed at 2,907. The Dow Jones lost 0.03% and closed at 26,412. Year to date, the S&P is up 16.63% and the Dow Jones is up 13.93%.
- Yields surged this week once again. The 5 year and 10 year U.S. Treasury Notes are yielding 2.38% and 2.56%, respectively.
- The spot price of WTI Crude Oil rose this week. Prices rose 1.16% and closed at $63.81 per barrel. Year to date, Oil prices are up 40.52%.
- The spot price of Gold fell 0.08% this week and closed at $1,290.78 per ounce. Year to date, Gold prices are up 0.65%.
- Initial jobless claims fell by 8,000 to 196,000 for the week to its lowest level since 1969. The four-week moving average of claims fell by 7,000 to 207,000. Claims fell by 2,000 in California and Texas.
- The producer price index (PPI) rose by 0.6% versus expectations for an increase of 0.3%, mostly due to rising oil prices. The year-over-year measure came in at 2.2%.
- PPI ex-food, energy, and trade services was flat versus expectations for a 0.2% increase and the year-over-year rate came in at 2.0%.
- Factory orders fell by 0.5%, in-line with expectations
- The consumer price index rose by 0.4%, in-line with expectations and the year-over-year rate came in at 1.9%
- Core CPI rose by 0.2%, in-line with expectations and the year-over-year rate came in at 2.0%
- Import prices rose by 0.6% versus expectations for an increase of 0.4%
- The University of Michigan’s index of consumer sentiment fell 1.5 points to 96.9 in the April preliminary report versus expectations for a reading of 98.2
Fact of the Week
- There are 30 million job opening in the United States that pay at least $55,000 a year and do not require a bachelor’s degree. (Georgetown University)
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