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Pence Wealth Management Financial Markets Report

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)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg.

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