Week of June 6 2014- Weekly Recap & The Week Ahead
Monday, June 9th, 2014“People try to really read the tea leaves, even though there’s really not enough information to make conclusions. And then they’ll get exuberant, and then depressed. I mean, as Warren Buffet said, dealing with the market is like dealing with a manic depressive.” — Tesla’s Elon Musk
1. US factory orders increase for third straight month — Reuters, new orders for U.S. factory goods rose for a third straight month in April, pointing to strength in manufacturing and the broader economy. New orders for manufactured goods increased 0.7 percent. March’s orders were revised to show a 1.5 percent increase instead of the previously reported 0.9 percent rise.Orders excluding the volatile transportation category increased 0.5 percent as bookings for primary metals, electrical equipment, appliances and components and capital goods rose.
2. ECB installs negative deposit rate — CNBC, the European Central Bank (ECB) took the unprecedented step by imposing a negative interest rate on banks for their deposits — in effect charging lenders to park money with it. At its June monetary policy meeting, the ECB cut the rate on its deposit facility for banks from 0 percent to minus 0.10 percent — the first time a major global central bank has moved rates into negative territory. It also cut its main interest rate to from 0.25 percent to 0.15 percent, and also cut the rate on its marginal lending facility by 35 basis points to 0.4 percent from 0.75 percent.
3. US created 217,000 jobs in May and unemployment rate declined to 6.3% —CNBC, non-farm payrolls grew at a pace in line with recent trends, rising 217,000 in May as the unemployment rate held steady at 6.3 percent. Most of the job gains came on lower-paying industries as wages rose modestly, increasing 5 cents an hour to maintain the 2.1 percent growth over the past 12 months. A broader measure of joblessness that includes those working part time for economic reasons and those who have quit looking remained elevated at 12.2 percent.
4. Bank of America (BAC) in talks to pay $12bn over probe — ft, Bank of America is in talks to pay at least $12B to settle mortgage-related probes from the Department of Justice (DOJ) and various states. The DOJ was previously reported to be seeking more than $13B from BofA (BAC) over its mortgage lending – generally over loans tied to Countrywide and Merrill Lynch. The bank has already reached a $9.5B settlement with the Federal Housing Finance Agency.
The week ahead — Economic data from Econoday.com:
