GREECE GIVES IN, STOCKS RALLY
In an about-face development, the Greek government acceded to the demands of its creditors Thursday night. Prime minister Alexis Tsipras submitted a bailout proposal similar to the one the Greek people had rejected by referendum on July 5, including sales tax hikes, pension spending cuts and debt restructuring. Leaders of the European Union will discuss the new proposal at a Sunday summit. A 3-year, €53.5 billion relief package depends on their approval, and the approval of Greece’s parliament. Wall Street certainly approved the turn of events on Friday, with the S&P 500 rising 1.23%. For the week, the S&P went -0.01% to settle at 2,076.62, the Dow +0.17% t0 reach 17,760.41, and the NASDAQ -0.23% to descend to 4,997.70.1,2
A GAIN FOR THE ISM SERVICES PMI
The Institute for Supply Management’s services sector purchasing manager index rose 0.3 points in May to a mark of 56.0. For the past year, it has averaged a reading of 57.2. By ISM’s barometer, the sector has expanded for 65 straight months.3
YELLEN: 2015 RATE HIKE SEEMS “APPROPRIATE”
Speaking in Cleveland Friday, Federal Reserve chair Janet Yellen said that “it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.” She noted that the steps to normalization would be data-dependent and gradual, adding that “monetary policy will need to be highly supportive of economic activity for quite some time.”4
CRUDE & GOLD PRICES SINK
West Texas Intermediate crude closed down at $52.74 on the NYMEX Friday after rising more than $1.oo for the session. Gold and silver both lost 0.5% for the week, respectively settling at $1,157.90 and $15.48 on the COMEX Friday.5
THIS WEEK: U.S. markets will react to the outcome of the EU summit Monday; no major news is scheduled stateside. Tuesday, June retail sales figures complement earnings from Fastenal, Johnson & Johnson, JPMorgan Chase, Wells Fargo and Yum! Brands. Wednesday, Fed chair Janet Yellen testifies on monetary policy in Congress; Wall Street also considers a new Fed Beige Book, the June PPI, June industrial output and earnings from Bank of America, BlackRock, Intel, Delta Air Lines, East West Bancorp, Kinder Morgan, Seagate, U.S. Bancorp and Netflix. Thursday brings new initial claims numbers and earnings from BB&T, Blackstone Group, Charles Schwab, Domino’s, eBay, Goldman Sachs, Google, Mattel, Philip Morris, Schlumberger, Citigroup, Sherwin-Williams and UnitedHealth. Friday, earnings from Comerica, GE and Honeywell appear plus the June CPI.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -0.35 +5.00 +14.83 +6.88
NASDAQ +5.52 +13.68 +25.51 +13.40
S&P 500 +0.86 +5.70 +18.53 +7.03
REAL YIELD 7/10 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.55% 0.27% 1.26% 1.81%
Sources: wsj.com, bigcharts.com, treasury.gov – 7/10/156,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
WEEKLY QUOTE
“The wisest mind has something yet to learn.”
– George Santayana
WEEKLY TIP
Do you have any idle money around – money parked in an account that is basically forgotten or earning little or no interest? It may be time to explore other options for those dollars. That money could be working harder for you.
WEEKLY RIDDLE
Jacquie and her daughter Amanda walk past a man in a café. Amanda says “Hello, father” – and a split-second later, so does Jacquie. How are they both able to make this remark to him without any confusion or embarrassment?
Last week’s riddle:
What has no arms, legs or form, yet goes up without ever coming down?
Last week’s answer:
Your age.
Citations.
1 – bloomberg.com/news/articles/2015-07-10/greece-seeks-eu53-5-billion-bailout-as-tsipras-bows-to-demands [7/10/15]
2 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [7/10/15]
3 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [7/6/15]
4 – businessinsider.com/janet-yellen-us-economic-outlook-speech-july-10-2015-7 [7/10/15]
5 – proactiveinvestors.com/companies/news/62360/gold-drops-01-to-1157-wti-little-changed-at-5274-62360.html [7/10/15]
6 – markets.wsj.com/us [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F10%2F14&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F10%2F14&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F10%2F14&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F9%2F10&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F9%2F10&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F9%2F10&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F11%2F05&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F11%2F05&x=0&y=0 [7/10/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F11%2F05&x=0&y=0 [7/10/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/10/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/10/15]
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, Mark is known as The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing 401k consulting for small businesses and financial Advisor services for professional athletes and individuals. Stonecreek is located in Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, and American Fork in Utah.
