Dow edged up 15, decliners over advancers 4-3 & NAZ rose 7. The MLP index was off fractionally in the 414s & the REIT index slid a fraction in the 309s (both near recent lows). Junk bond funds were mixed & Treasuries dropped. Oil is below 60 & gold was flattish
AMJ (Alerian MLP Index tracking fund)
Household spending climbed in May by the most in almost 6 years, buoyed by gains in incomes as the US job market strengthened. Purchases increased 0.9%, the biggest gain since Aug 2009, after rising 0.1% in Apr, according to the Commerce Dept. The forecast called for a 0.7% advance. Incomes rose 0.5% for a 2nd month. Consumers may finally be putting savings from lower gas prices to work after holding back earlier this year. Higher stock & home prices that are lifting household wealth, in addition to increases in employment, may help Americans feel secure enough to boost spending. The price index tied to consumer spending increased 0.3% in May from the prior month & rose 0.2% from May 2014. This inflation measure is preferred by Fed policy makers & hasn’t met their 2% target for 3 years. Stripping out the volatile food & energy components, the price measure increased 0.1% from the month before & climbed 1.2% in the 12 months ended May. After adjusting for inflation, which generates the figures used to calculate GDP, purchases climbed 0.6% last month, the biggest gain since Aug, after being little changed in Apr. That increase may provide a needed lift to growth, especially after a poor showing in Q1. Spending on durable goods, including automobiles, increased 2.3% in May after adjusting for inflation, following a 0.1% drop in Apr. Purchases of non-durable goods, which include gasoline, rose 0.9%, while outlays on services climbed 0.2%. Disposable income, or money left over after taxes, increased 0.2% from the prior month after adjusting for inflation & was up 3.5% over the past year. The saving rate decreased to 5.1% from 5.4% in May.
Filings for US unemployment benefits held below 300K for the 16th straight week, signaling a tighter labor market that will help propel growth in H2. Jobless claims rose 3K to 271K, according to the Labor Dept. The forecast called for 273K new applications. Limited dismissals underscore employer optimism about sales prospects as the economy regains ground after Q1 setback. While staffing cutbacks have waned, more hiring would help convince Federal Reserve officials that the economy can withstand an increase in the benchmark interest rate this year. Since the beginning of Mar, claims have held below 300K, a level consistent with progress in the labor market. The 4-week average of claims, a less-volatile measure than the weekly figure, dropped to 273K from 277K in the prior week. The number continuing to receive jobless benefits rose 22K to 2.25M in the latest week & the unemployment rate among people eligible for benefits held at 1.7%.
Euro-area finance ministers expressed bemusement on the status of talks with Greece after they were presented at the last minute with competing proposals aimed at resolving the standoff over aid. Greece’s creditors pulled together a common position that doesn’t have the support of the Greek gov & sent it to finance chiefs to review as the basis for a deal, the Dutch finance minister said. A Greek official said that Greece had submitted its own proposals. “We have run out of comments and also run out of patience,” Malta’s Finance Minister told reporters today. The 2 documents were merged minutes before ministers met, he said. “We don’t know what has been deleted or added. We don’t know where the disagreements are.” Ministers are losing their calm as they meet for the 4th time in a week after talks between Prime Minister Tsipras & the heads of his country’s 3 creditor institutions failed to produce a compromise position. German Finance Minister Schaeuble said that rather than making progress the Greeks had moved “backwards.” “The process continues -- it’s quite the ping-pong back-and-forth,” said the Finnish Finance Minister. “The worst case scenario for now is that we continue this tomorrow.”
Helpful economic news in the US was drowned about but the Greek debt mess going form bad to awful. It is growing increasingly difficult to imagine how the the enormous Greek debt can be extended, let alone increased in the near future. But popular averages have hardly budged from their record highs. Someday this disconnect will be resolved & looks like it will not be pretty.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLQ15.NYM | ....Crude Oil Aug 15 | ...59.90 |  ...0.37 | (0.6%) |
| GCM15.CMX | ...Gold Jun 15 | .......1,173.30 | ...0.70 | (0.1%) |
Household spending climbed in May by the most in almost 6 years, buoyed by gains in incomes as the US job market strengthened. Purchases increased 0.9%, the biggest gain since Aug 2009, after rising 0.1% in Apr, according to the Commerce Dept. The forecast called for a 0.7% advance. Incomes rose 0.5% for a 2nd month. Consumers may finally be putting savings from lower gas prices to work after holding back earlier this year. Higher stock & home prices that are lifting household wealth, in addition to increases in employment, may help Americans feel secure enough to boost spending. The price index tied to consumer spending increased 0.3% in May from the prior month & rose 0.2% from May 2014. This inflation measure is preferred by Fed policy makers & hasn’t met their 2% target for 3 years. Stripping out the volatile food & energy components, the price measure increased 0.1% from the month before & climbed 1.2% in the 12 months ended May. After adjusting for inflation, which generates the figures used to calculate GDP, purchases climbed 0.6% last month, the biggest gain since Aug, after being little changed in Apr. That increase may provide a needed lift to growth, especially after a poor showing in Q1. Spending on durable goods, including automobiles, increased 2.3% in May after adjusting for inflation, following a 0.1% drop in Apr. Purchases of non-durable goods, which include gasoline, rose 0.9%, while outlays on services climbed 0.2%. Disposable income, or money left over after taxes, increased 0.2% from the prior month after adjusting for inflation & was up 3.5% over the past year. The saving rate decreased to 5.1% from 5.4% in May.
Consumer Spending in U.S. Rises by Most in Almost Six Years
Filings for US unemployment benefits held below 300K for the 16th straight week, signaling a tighter labor market that will help propel growth in H2. Jobless claims rose 3K to 271K, according to the Labor Dept. The forecast called for 273K new applications. Limited dismissals underscore employer optimism about sales prospects as the economy regains ground after Q1 setback. While staffing cutbacks have waned, more hiring would help convince Federal Reserve officials that the economy can withstand an increase in the benchmark interest rate this year. Since the beginning of Mar, claims have held below 300K, a level consistent with progress in the labor market. The 4-week average of claims, a less-volatile measure than the weekly figure, dropped to 273K from 277K in the prior week. The number continuing to receive jobless benefits rose 22K to 2.25M in the latest week & the unemployment rate among people eligible for benefits held at 1.7%.
Jobless Claims in U.S. Hold Below 300,000 for a 16th Week
Euro-area finance ministers expressed bemusement on the status of talks with Greece after they were presented at the last minute with competing proposals aimed at resolving the standoff over aid. Greece’s creditors pulled together a common position that doesn’t have the support of the Greek gov & sent it to finance chiefs to review as the basis for a deal, the Dutch finance minister said. A Greek official said that Greece had submitted its own proposals. “We have run out of comments and also run out of patience,” Malta’s Finance Minister told reporters today. The 2 documents were merged minutes before ministers met, he said. “We don’t know what has been deleted or added. We don’t know where the disagreements are.” Ministers are losing their calm as they meet for the 4th time in a week after talks between Prime Minister Tsipras & the heads of his country’s 3 creditor institutions failed to produce a compromise position. German Finance Minister Schaeuble said that rather than making progress the Greeks had moved “backwards.” “The process continues -- it’s quite the ping-pong back-and-forth,” said the Finnish Finance Minister. “The worst case scenario for now is that we continue this tomorrow.”
Dueling Greece Plans Confound Race for Bailout Deal
Helpful economic news in the US was drowned about but the Greek debt mess going form bad to awful. It is growing increasingly difficult to imagine how the the enormous Greek debt can be extended, let alone increased in the near future. But popular averages have hardly budged from their record highs. Someday this disconnect will be resolved & looks like it will not be pretty.
Dow Jones Industrials
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