US FINANCIAL MARKET
Wall Street opens flat, S&P coming off record
- The Fed said yesterday it expects rates to stay low for a “considerable time” after monthly bond purchases end as the economy recovers.
- Global stocks advanced, with U.S. equities trading near records, and bonds rallied from Australia to Spain after the Federal Reserve said rates will remain low as the economy grows.
- Emerging-market currencies strengthened and the dollar fell to the lowest in a month.
- Brent crude jumped to a nine-month high as Iraqi forces battled insurgents and major oil companies evacuated workers from OPEC’s second-biggest producer.
- July 14 contracts for crude WTI oil trade at $105.86, while August 14 contracts for crude Brent oil trade at $114.88 in the morning.
Amazon unveils 3D ‘Fire’ phone
- Users can press a button and point the phone at an object such as a can of soup or work of art, or direct it to listen to a song. If the device recognizes it, the user can buy it on Amazon, if it’s sold there.
- Amazon is selling the Fire phone for $649 contract-free. From July 25, a 32-GB version will go for $199.99 with a contract on AT&T.
- To sweeten the deal, Amazon offered 12 months of membership to Prime, its two-day delivery and streaming service.\
US ECONOMY & POLITICS
Fed keeps faith in recovery, bumps up expected rate-hike path
- The Federal Reserve on Wednesday expressed confidence the U.S. economic recovery was on track and hinted at a slightly more aggressive pace of interest rate increases starting next year.
- The US GDP growth forecast for 2014 cut from 2.9 % to a range of between 2.1 % and 2.3 %, Yellen said that was the result of “transitory” factors like a severe winter and that a rebound was underway.
- Growth is expected at around 3 % for the next two years – above the long-term trend.
- The median projection for rates at the end of 2015 was 1.125 %, up slightly from March.
- Officials projected a slightly more aggressive path of rate hikes for 2016, with the end-year median placed at 2.5 % versus 2.25 % in March.
- Fed officials also lower their view of the expected long-term federal funds rate from 4 % to 3.75 %.
- As widely expected, the Fed is reducing its monthly asset purchases from $45 billion to $35 billion beginning in July.
- In its policy statement, the Fed said it would continue reinvesting the proceeds of its asset holdings as they mature, meaning the central bank’s $4.3 trillion balance sheet will for now remain intact.
Leading Economic Indicators in U.S. Rise for Fourth Month
- The Conference Board’s U.S. leading economic indicators gauge, a measure of the outlook for the next three to six months, increased 0.5 % in May after a 0.3 % gain in April
- The index of coincident indicators, a gauge of current economic activity, climbed 0.3 % in May after a 0.2 % increase the prior month.
- A measure of lagging indicators rose 0.4 % after a 0.3 % advance in April.
Jobless Claims in U.S. Fell Last Week as Labor Market Heals
- Jobless claims fell 6,000 to 312,000 in the week ended June 14
- The median forecast of 50 economists surveyed by Bloomberg called for 313,000.
- The four-week average of claims, a less-volatile measure than the weekly figure, declined to 311,750 from 315,500 the week before.
- The number of people continuing to receive jobless benefits dropped by 54,000 to 2.56 million in the week ended June 7, the fewest since October 2007.
EUROPE & WORLD
U.K. Retail Sales Drop as Food Slump Offsets World Cup
- Sales including auto fuel declined 0.5 % from April.
- Food sales slid 2.4 % after surging the previous month during the Easter holiday. Sales at other retailers jumped 2.2 %, helped by demand for replica football jerseys before the World Cup tournament that started this month.
Vietnam Devalues Dong First Time in a Year to Spur Exports
- The State Bank of Vietnam devalued the dong by weakening its reference rate for the currency by 1 % to 21,246 per dollar.
King Felipe VI Pledges National Renewal for All Spaniards
- Felipe VI, proclaimed King of Spain today, pledged to lead a process of national renewal, saying all Spaniards should be able to live together within the nation.
France Joins U.S. in Urging Political Change for Iraq
- The U.S. yesterday urged the Shiite-dominated government of Iraqi Prime Minister Nouri al-Maliki to be more inclusive of minority groups to help roll back gains by the rebel Islamic State in Iraq and the Levant, an al-Qaeda breakaway.
TODAY in HISTORY
- Congress abolished slavery in the U.S. territories (1862)
- The Federal Communications Commission (FCC) was created (1934)
- The Civil Rights Act of 1964 was approved (1964)
- Pope Paul VI proclaimed John Neumann, the first male saint from the United States (1977)
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