U.S. and World News
- After witnessing ongoing joint military drills between South Korea and the United States, North Korea has cancelled planned discussions with South Korea and threatened to cancel the scheduled meeting with the United States on June 12th. Kim Jong-un expressed displeasure with having to unilaterally abandon its nuclear program. Vice Foreign Minister Kim Kye-gwan stated “If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the North Korea-U.S. summit”. The United States has stated that it continues to plan for the scheduled meeting on June 12th.
- UAE Energy Minister Suhail bin Mohammed al-Mazroui stated that OPEC has the ability to produce enough oil to cushion oil prices if the United States re-imposes sanctions on Iran. The Energy Minister told reporters that OPEC is familiar with situations like these and there is no reason to worry about supply. The IEA cut its global demand growth for oil to 1.4 million barrels per day in 2018, lower than a previous estimate of 1.5 million barrels per day.
- The markets ended the week slightly lower. The S&P 500 fell 47% this week and closed at 2,712.97. The Dow Jones lost 0.36% and closed at 24,715.09. Year to date, the S&P is up 2.24% and the Dow Jones is up 0.89%.
- Yields moved higher this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 89% and 3.06%, respectively.
- The spot price of WTI Crude Oil rose 89% this week and closed at $71.33 per barrel. Year to date, Oil prices are up 18.66%.
- The spot price of Gold decreased by 05%, closing at $1,292.29 per ounce. Year to date, Gold prices are down -0.81%.
- Initial jobless claims rose 11,000 to 222,000 for the week. The largest increases were in Missouri, Kentucky, and California. The four-week moving average moved lower 3,000 to 213,000. The pace of layoffs still remains very low.
- The Philadelphia Fed manufacturing index rose by 11.2 points in May to 34.4 versus expectations of 21.0.
- The new orders component rose 22.2 points to 40.6 to the highest level since 1973.
- Housing starts fell by 3.7% in April to a seasonally adjusted rate of 1,287k which was below expectations of a -0.7% decline. The decline was led by the multi-family category while single family homes moved higher by 0.1%.
- The largest declines were in the Northeast and Midwest , reflecting unseasonable weather.
- Building permits fell 1.8% in April to an annualized rate of 1,352k in April compared to expectations of a 2.1% decline.
- Industrial production rose 0.7% in April versus expectations of a 0.6% increase. Industrial production was led by utilities and mining output in April.
- Retail sales rose by 0.3% in April, matching expectations. The figure was led higher by an increase at gas stations.
- Retail sales ex-autos rose 0.3% in April versus expectations of a 0.5% increase.
Fact of the Week
- The royal wedding between Prince Harry and Meghan Markle is estimated to cost around $45.8 million. This is well over 1000 times the cost of the average marriage in the US and UK at $34,000. Almost all of the $45.8 million budget is for security, which is estimated to cost $43 million. (Source: Business Insider)
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