May 30, 2017
“The only function of economic forecasting is to make astrology look respectable.”
            John Kenneth Galbraith
That being said, however, economic interpretations of past events and data can be quite useful.  For instance, new home sales fell in April by an annualized 11.4% - far more than economists were expecting (because, forecasting, you know…).  The major problems with new home sales are that housing prices have largely recovered to pre-recession levels, while wages have not.  So homebuyers in the affordable-home market are still having trouble getting mortgages, but house prices are rising in part due to low interest rates on those mortgages that potential buyers can’t get.  Most of the activity in new-home sales is not in affordable homes, but in pricier markets, and builders are concentrating on more expensive homes, which makes supply a problem as well.
First quarter GDP was revised upward from the initial reading of 0.7% to 1.2% annualized, but we had a larger-than-expected trade deficit in April.  Still, we’re expecting the Federal Reserve Board to raise interest rates next month (odds are 83% - is that another prediction?).  Given that interest rate hikes take about six months to percolate through the economy, does it make sense to raise rates more than twice a year?  I’m not sure, but Janet Yellen hasn’t asked me.  In addition, the Fed is dealing with the $4.5 trillion in debt (U.S. government bonds and mortgages) that it owns – purchased during tough times to prop up government debt and keep interest rates low.  Now it’s time to unravel the balance sheet by letting some of that debt mature instead of reinvesting it.  But no one knows what the effect will be of letting some debt mature each month and slowly reducing the Fed’s positions.  Predictions, anyone?
Even with the revision upward, growth this year has so far been slowish.  So now the predictions (sorry!) for the whole year are being revised from 3% to around 2%.  Our economy is $17 trillion in size, so a one percent change in growth is $170 billion.  That’s a big difference that would affect tax receipts, corporate and personal spending, and company profits.  I guess, by the beginning of next year, we’ll know if these predictions are accurate.
Oil prices are wobbly in the wake of several pieces of oil-related news.  First, OPEC and many non-OPEC countries have finalized their agreement to keep production cuts in place for an extra nine months, through March of 2018.  This should have caused oil prices to rise, but while production is reduced, exports are not.  Oil producing nations are still exporting just as much oil as always, taking it from their own reserves when necessary, in the hopes that overall supply will eventually be reduced.  But this just encourages frackers in the U.S. to open new wells (oil rigs have increased for 19 straight weeks to a current level of 722) because the cost to open a fracking well is much less than to open a drilled well, where uncertainty about where to find oil (i.e. dry wells) adds a lot of cost to entering the market.  Additionally, the White House has just proposed selling half of our strategic energy reserves AND allowing drilling in the Alaska National Wildlife Refuge – measures that would again greatly increase the supply of oil in the world.  It’s no wonder that oil prices are stuck below $50 per barrel and that the Saudis, who need oil prices to be higher in order to make as much as possible from their proposed Saudi Aramco IPO next year, are metaphorically tearing their hair out because they no longer control oil markets.  OPEC meets again in November.
And speaking of fuel, General Motors is now being accused of programming some heavy-duty pick-up trucks to cheat on diesel emission tests.  Sound familiar?  We learned it from watching YOU, Volkswagen!  G.M. denies the allegation that about 700,000 trucks sold from 2011 to 2016 as “clean diesel” were not exactly as clean as they were portrayed.  These trucks were Chevy Silverado and GMC Sierra pick-ups with 2500 HD Duramax engines.
Let’s talk bitcoin.  Last week bitcoin went crazy and reached a record high of $2799 on Thursday before dropping back down to slightly more modest levels.  This morning, bitcoin is trading near $2300.  One year ago, it was trading around $450.  What is going on?  Well, Japan’s announcement that it will accept bitcoin as legal tender has  revolutionized the currency, which is up almost 140% in the past two months.  Where once 80% of bitcoin was bought with Chinese yuan, now more than half of bitcoin trades are in Japanese yen.  And Japan has instituted new regulations hoping to forestall any repeat of 2014’s Mt. Gox hacking, which resulted in 850,000 stolen bitcoin.  Remember that bitcoin trades anonymously.  So if it’s stolen, sorry!  Bold savers who are receiving a pittance in interest on their money market accounts are buying bitcoin, which doesn’t pay interest at all, but whose appreciation has been meteoric.  We are also seeing “initial coin offerings” in which start-up crypto-currencies release new coins onto the market which can only be bought by existing crypto-currencies.  It is a rising tide which raises all bitcoin (plus ether and other new currencies).  Just FYI, $2500 will now buy you about one bitcoin, two ounces of gold, or ten shares of the SPDR S&P 500 ETF.
And remember that the recent WannaCry malware requested ransom in bitcoin.  Is that the sound of businesses all over the world stockpiling just a little to have on hand in case the next malware is worse?  The Economist reports that only about $80,000 in ransom was paid to WannaCry, whose virus infected computers and networks in order to encrypt files, and requested ransom be paid for unencryption.  Interestingly, the virus, which was originally suspected of coming from North Korea now seems to have originated in China.  The evidence?  Of all of the ransom notes sent, only the ones written in Chinese had correct grammar and punctuation.
For the first time in 30 years, Chinese debt has been downgraded by Moody’s rating service.  It now receives an A1 rating, down one grade from AA3, and the fifth highest grade that Moody’s offers.  Moody’s outlook on Chinese debt has been reduced from stable to negative.  Standard & Poor’s also cut its outlook to negative, but maintains its AA- rating.  Both services are concerned about rising levels of Chinese debt and the difficulties of servicing that debt.  Chinese officials say that the concern is overblown.
You may not know this, in fact if you don’t, consider yourself lucky - you must have escaped the Bernie Madoff Ponzi-scheme web of destruction.  But there is a Madoff Victim Fund, whose administrator is Richard Breeden, whose job it is to allocate the assets that are left of Madoff’s empire and divide them among his victims.  The Fund has existed for more than four years.  In that time, the administering firm has earned $40 million (from the pool of assets) and paid out, wait for it, nothing at all!  Administrator Breeden says that the paperwork is overwhelming and victims have been slow to respond (sure, blame them) and that payments will begin by the end of the year.  The Madoff Victim Fund is worth approximately $4 billion.
For the week ending May 26th, the S&P 500 closed at 2,415, up 1.4% for the week.  The Dow Jones Industrials closed at 21,080, up 1.3%, and the Nasdaq Composite Index finished at 6,210, up 2% for the week.  Both the S&P and the Nasdaq finished at record highs.  The yield on the ten-year Treasury Note ended at 2.25%, while crude oil was worth $49.80 per barrel, and gold was worth $1,267.60 per ounce.  $1.1168 bought one Euro.
Elizabeth E. Cook
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including Reuters, The New York Times, The Wall Street Journal, Barron’s, Forbes, The Economist, businessinsider.com, and Bloomberg.  If you have any questions about what you’ve read, please call us at 203.458.5220 or reply to this email.  Thank you for your attention.
June 5, 2017
Last week was all about jobs, and retail closings, and the Paris Accords, and then, over the weekend, the London attacks.  None of it was good news.  But the three major market indices finished at record highs on Friday.  Huh?  Consumer sentiment, also, is near record highs, according to the University of Michigan calculations.  Huh?
Let’s start with jobs.  The payroll firm ADP reports that private businesses added 253,000 new jobs in May, but the Department of Labor, which takes its data from a different source in a different week, reports only 138,000 new jobs created.  The DOL report also states that our unemployment rate fell from 4.4% to 4.3%, which is its lowest level in 16 years.  Labor force participation remained nearly steady at 62.7%, and under-employment fell to 8.7%, the lowest level since November 2007.
It is not expected that these employment numbers (economists were expecting 180,000 new jobs created) will deter the Federal Reserve Board from raising rates next week.   But the interesting thing is that the Fed has now raised rates three times since the Recession, and yet interest rates in the marketplace remain low.
In fact, after the disappointing jobs report on Friday, seen by many as an indication of a weak U.S. growth rate, money once again poured into Treasuries, with higher demand creating higher prices, and higher prices causing lower yields.   The yield on the ten-year Treasury Note was down from 2.21% to 2.16% on Friday.
Oil prices also fell, as the global oil oversupply continues.  Despite the OPEC nations reducing output, Libya and Iran are increasing theirs, as are the shale oil producers in the U.S.
Lower oil prices have wide-ranging effects.  One of them is that U.S. consumers are taking cheap gas for granted and have shifted their buying habits accordingly.  Cars that were in vogue during the $4.00 gas era (i.e. Priuses and Volts and Leafs and Ferns and Clouds – some of which I might have made up) are being replaced by SUVs and pickup trucks.  Because our memories are apparently very very short.
So – Hyundai (and its affiliate Kia), which makes fuel-efficient cars, is suffering.  In 2013 Hyundai had 5% market share in the U.S.  Now it is down to 4%, and sales are down 4.8% this year.  Why?  Hyundai bet that American consumers would continue to buy smart vehicles.  They weren’t counting on the fact that gas under $3.00 is comfortable enough for people to buy cars like I do: “Ooooh, shiny, and BIG!”  While other countries are mandating electric cars (for instance, India will outlaw all fossil-fuel burning cars by 2030), the U.S. is backing away from fuel-efficiency standards.
Which has nothing to do with malls, except that we use cars to get to them.  But Credit Suisse is expecting 25% of all shopping malls to close in the next five years.  Once anchor tenants leave (Macy’s, J.C.Penney’s, and Sears are all closing stores), the smaller retailers don’t have enough foot traffic to thrive.  In Friday’s jobs report, traditional retailers lost 6,100 jobs, while online retailers added 2,900.  With the e-tailers using drones and robots in their warehouses, and with restaurants using self-pay table units and kiosks, we don’t expect those retail jobs to come back.  Interestingly, the U.S. has 23.5 square feet (s.f.) of retail space per person, versus 16.4 s.f. in Canada, and 11.1 s.f. in Australia.  All other nations have less.  Our past overbuilding is haunting us now.
The consumer-discretionary sector is up 13% this year so far, but 70% of that growth comes from four stocks: Amazon, McDonald’s, Comcast, and Home Depot.  Perhaps this information adds fuel to our analysis.  Amazon of course is king of the online retailers.  And fast-food is an immediate, not mail-order, need.  Comcast provides a service rather than a product, and Home Depot sells stuff that is often too heavy to easily ship.  Plus they do seasonal, and offer classes.  Perhaps if Michael Kors sold handbags that weighed 100 pounds, it would not be seeing same-store sales down 14%, and would not be closing 125 full-priced stores.  (On a personal note, I live in an outlet-mall dominated environment, and will apparently have plenty of access to Michael Kors products for the foreseeable future.)
And speaking of Amazon, its stock closed above $1,000 per share last week for the first time.  S&P categorizes Amazon not as a tech company, but as a retailer (despite its very profitable cloud-computing business).  Its stock has risen 34% this year, just like Facebook and Apple.  But there have been no stock splits.  Apparently the idea that one’s stock will be more popular if it is more affordable has become old-fashioned.  In 1997 (the year Amazon went public) there were 93 stock splits in the S&P 500.  This year there have been two so far.
Blue Apron, purveyor of “home meal kits” has filed for an initial public offering (IPO) under the symbol APRN (nurses everywhere will enjoy this).  The company is five years old and had net sales of $795.4 million last year, which is ten times as much as it sold two years earlier.  But net losses are also rising, up 16% in 2016 to $54.8 million.  Blue Apron will reportedly establish three classes of stock: Class A will have one vote per share and will be sold to the public.  Class B will have ten votes per share and will be held by insiders, and Class C will be non-voting stock, which will be used to buy other companies.
Also apparently considering an IPO is Uber, which has been much talked of recently.  Uber has fired its head of autonomous (self-driving) cars because he was apparently not helping defend the suit brought by Alphabet (parent of Google) that he stole Google’s tech research and sold it to Uber.  The CFO has quit to go to an undisclosed firm.  Accusations of sexual harassment are rampant.  But Uber has announced that it is looking for a CFO with public-firm experience, which everyone is taking as a sign of a future IPO.
In random news, 13 of 14 Disney parks worldwide are experiencing slowing attendance.  Only Disneyland Shanghai, which has been open for less than one year, is booming.  BUT, this is all part of Disney’s plan.  By raising ticket costs for peak periods, Disney is hoping to cut down on overcrowding.  So while attendance is down, operating income is up.  Disney had 139 million guests in 2016, versus 47.4 million at the five Universal theme parks.  Disney has just opened its “Avatar” experience at Orlando’s Animal Kingdom, and lines are up to four hours long.
Annual births in Japan have fallen below the one million mark for the first time in a century of record keeping.  Deaths have outpaced births for the past several years, and Japan’s population peaked at 128 million in 2010.  But what will happen to their pension and health-care systems with fewer young people to pay in?  Japan already has a serious labor shortage, and in some rural areas, the average population age is greater than 65 and empty houses are rife.  Demographers now expect the population to fall by about one million EACH YEAR, which would mean a total population of 80 million by 2060.  Living costs in Japan are very high, which is probably part of why the birth rate is so low.  Well, that and the fact that people so frequently work themselves to death that the Japanese have a word for it: karoshi.
The cost of living is lower in (most of) the U.S., but income inequality is a growing problem.  In the 1950s, 20% of all income went to the top 10% richest households.  Today, 80% does.  76% of all family wealth is held by the top 10%, while only 1% of all family wealth is held by the bottom 50% of households.  Student loan balances and arrears are growing, while young people live with their parents longer and homeownership has fallen to 63%.  Our birthrate is right at 2.0, meaning we do replace ourselves, unlike the Japanese, but will it remain there?
There are no easy answers.  And there is no predicting the market in the short run.  That’s why we spend so much time balancing risk and return, and asset allocating for all eventualities.  We don’t want anyone to learn the hard way that, as John Maynard Keynes is supposed to have said, “The market can remain irrational longer than you can remain solvent.”
For the week ending June 2nd,  the Standard & Poor’s 500 closed at 2,439, the Dow Jones Industrials at 21,206, and the Nasdaq Composite at 6,305.  The yield on the ten-year Treasury finished at 2.16%.  Oil was worth $47.66 per barrel, gold was worth $1,276.80 per ounce, and one Euro cost $1.1280.
Elizabeth E. Cook
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including the New York Times, the Associated Press, the Wall Street Journal, Barron’s, Pew Research Center, The Economist, businessinsider.com, Bloomberg, and Credit Suisse.  If you have questions about anything you’ve read here, please call us at 203.458.5220 or reply to this email.  Thank you for your attention.
June 12, 2017
The Federal Reserve Board meets this week and is widely expected to raise rates.  We will hear their decision on Wednesday, as usual, and then Janet Yellen will speak to us.  Anticipation of the rate hike has been good for financial stocks, which will benefit from being able to charge more to borrowers, while keeping payments to savers low.  Except for Goldman Sachs, which started its consumer-focused Marcus division last year and is attracting depositors by offering a (current) record 1.2% return on their money.  Goldman is a little late to this party, having only $12 billion in individual deposits, but wants to enjoy the stable funding that individual consumers provide.  Savers are much less likely to disappear during financial crises than institutions are.  JPMorgan Chase, by contrast, has $1.4 trillion in deposits.

On Friday (the second busiest trading day of the year), bank and energy stocks were up, but they remain among the poorest performers for the year (along with telecomm).  The Dow Jones Industrial Average hit a new high, but the Standard and Poor’s 500 and the Nasdaq Composite Index both slid, largely due to a teensy-tiny little tech debacle (if such a thing is possible).  We used to discuss the FANG stocks (Facebook, Amazon, Netflix, and Google), but Netflix has become a laggard, and Goldman has just coined FAAMG as more relevant (Facebook, Apple, Amazon, Microsoft, and Google (Alphabet)).  Those five stocks are responsible for 41% of the market capitalization growth of the S&P this year, and were all down more than 2% on Friday.  Between just Apple (down 3.9%) and Microsoft (down 2.3%) we saw a loss of $97 billion in market cap.  In these high-flying growth stocks, share price growth has exceeded earnings growth, and it is possible that some investors were just taking profits, and then selling begat more selling.  Bloomberg also reported that the new iPhone 8 will not be as fast as its rivals, which no doubt contributed to Apple’s bad performance for the day.  In addition, with the Dow rising as its more tech-heavy index competitors fell, one has to wonder if we are seeing a cyclical change back to solid, stolid dividend-paying value stocks, or whether Friday was a one-off.

Have you been feeling a lack of headroom recently?  That’s probably because the country’s debt ceiling of nearly $20 trillion was reached back in March, and Treasury Secretary Steven Mnuchin has been using creative cash conservation measures to keep those Social Security checks coming.  Mnuchin hopes that Congress will act to raise the debt ceiling WITHOUT LIMIT before it adjourns for the summer, but so far they don’t even seem to be considering it.

And speaking of debt, credit-card defaults, which peaked during the financial crisis and had been declining ever since, have taken a turn for the worse, which is to say that defaults are rising.  They aren’t at levels anywhere near those of the depths of the recession, but two quarters in a row have turned the wrong way.  This is the sharpest rise in defaults since 2009.  It is unusual because unemployment is at record lows, and credit-card defaults usually track with unemployment.  So why is one up while the other is down?  Analysts believe it is because banks have once again begun to extend credit to high-risk borrowers.  Our advice to all borrowers (not you, because you’re in great shape) is to pay off high-interest-rate and floating-rate debt if possible, and consolidate debt at a low fixed rate so that you are immune to coming interest rate hikes.

Another corollary of low unemployment is that available job openings rise because there are fewer people to hire.  And our nationwide job openings rose to a record six million in April.  That means that six million jobs are available, while 6.8 million people are unemployed.  Problem solved!  But it isn’t, because the people who are unemployed are not the same people that employers are seeking.  There is a skills gap.  And an I-don’t-want-a-minimum-wage-job gap.  Jobs in durable-goods manufacturing fell by 30,000 for the month, while there were record openings in accommodation and food service, and construction openings rose 26%.  Economists expect that wages will have to rise to entice workers to those open jobs, but they’ve been saying that for a couple of years, and we have yet to see wages growing above about 2.5% annually.

With the growing retail-apocalypse (armagetail?) there is surprisingly good news coming from Nordstrom.  The Nordstrom family, which still owns 31% of the company after more than 100 years in business, is considering taking the store private.  The company has been very prudent in not over-expanding its physical base, and is known for its customer service - two areas in which it is quite contrary to retail as a whole.  And they are tired of being lumped in with Old Navy or Michael Kors by investors.  So they are looking for a private investor or investor group to take the company private so that it will not be tarred with the same brush as the rest of the retailaclysm.  Shop there!  They’re nice!

In semi-retail news, Apple is listening!  Well, not really, but kind of.    Apple is planning to expand its network of proprietary screen-fixing Horizon machines so that you don’t have to wait so long to get your phone fixed after your nephew drops it while playing Fruit Ninja.  Currently there are 500 Horizon machines available at Apple stores and mail-in repair centers.  But Apple is expanding its Horizons (!) this year into 400 third-party repair centers like Best Buy.  This expansion is no doubt in response to eight states which have initiated “right-to-repair” legislation, which would require that repair manuals and authorized replacement parts be available.   Currently, iPhone owners who get their repairs done at a third-party vendor run the risk of having their warranties voided.  Apple, along with Caterpillar and Medtronics, is actively opposed to the “right-to-repair” movement.  Over one billion iPhones have been sold worldwide and about 99% of them need a screen repair urgently.

Puerto Rico voted overwhelmingly for statehood over independence or remaining a U.S. territory.  This is the fifth time since 1967 that P.R. has taken this vote.  Only 23% of the electorate cast a ballot, for a couple of good reasons.  First, opponents of statehood (who mostly prefer independence) boycotted the vote.  Secondly, the vote is basically symbolic, since Congress is unlikely to recognize P.R.’s statehood - because it would add two Senators and about five Representatives to Congress - all likely Democrats.  Currently Puerto Rico has 3.5 million residents, Americans citizens, who don’t pay federal taxes, and don’t get to vote for President, and also fail to receive proportionate federal funding for social programs.  It also has a crippling 45% poverty rate and $72 billion in debt that it can’t afford to service.  Those might be good reasons for Congress to ignore the plebescite.

And finally, I was thinking about my shortly-upcoming birthday and bemoaning the fact that it will be a near-miss (meaning that next year is going to be ugly).  And then I read that new skeletal remains of homo sapiens have been discovered in Morocco that date back 300,000 years.  Whoa!  Not only is this more than 100,000 years older than previously discovered homo sapiens remains, it is also older than any to-date discovered neanderthal remains.  It changes everything!  Except my birthday, which I’m now going to enjoy.  I mean, I would have to be 299,941 years older than I am in order to be as old as those people!  And just FYI, the common ancestor of man and neanderthals (who is named Homo heidelbergensis, although I bet that’s not what his mom called him) lived about 500,000 years ago.  I’m still trying to get my head around the fact that man coexisted with neanderthals for thousands and thousands of years.  What were THOSE block parties like?

For the week ending June 9th, the S&P closed at 2,431, the Dow at 21,271, and the Nasdaq at 6,207.  The yield on the ten-year Treasury was 2.20%.  Crude oil cost $45.83 per barrel, gold cost $1,268.50 per ounce, and one Euro was worth $1.1193.

Elizabeth E. Cook

News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including the New York Times, the Wall Street Journal, Barron’s, Reuter’s, businessinsider.com, The Economist, and Bloomberg.  If you have any questions, please call us at 203.458.5220 or reply to this email.  Thank you for your attention.
June 19, 2017
On Wednesday Janet Yellen, Chairwoman of the Federal Reserve Board, announced that the Fed would raise short-term interest rates by a quarter percentage point to 1.25%. The Fed also outlined a plan to start reducing its $4.5 trillion portfolio of bonds, which it purchased to prop up the economy after 2008.
The stock market hardly reacted to the news of the rate hike, as it was widely anticipated.  The rate hike signals that the economy is relatively healthy and moving in the right direction. Eventually the increased rates should lead to better returns on Treasuries and CDs. I am starting to become nostalgic about the days when I could earn 4% on a CD at the local bank.
The other big, and horrifying, news in Washington D.C. last week was the shooting at the Republican lawmakers’ baseball practice this past Wednesday morning. Five people were injured, including Representative Steve Scalise of Louisiana and two law enforcement officials who are credited with heroically preventing a massacre.
In response to the shooting, politicians from both parties called for greater unity and reduced partisanship in Washington and across the nation. Hopefully this shooting will serve as a catalyst for the factions in our government to start working together to solve the major challenges we face, including healthcare and tax reforms and investments in our nation’s infrastructure.
Headlining U.S. business news was the announcement on Monday that Jeff Immelt, the long-tenured CEO of GE would step down this summer.  GE has been under pressure to make a leadership change from activist investors who have been dissatisfied with GE’s stock price performance.  Under Mr. Immelt’s leadership over the past 16 years, GE stock has been the worst performing stock in the Dow Jones Industrial Average. 
John Flannery, a 30-year GE veteran with extensive international experience and currently the head of GE’s health care business, will become the new CEO on August 1st.  GE stock increased 3.6% on the news of the management change.
At the end of the week Amazon announced that is purchasing Whole Foods for $13.7 billion, underscoring Amazon’s commitment to compete with the likes of Walmart in the grocery business.  Industry pundits speculate that Amazon will use Whole Foods to blend on-line and in-store food retailing. Potentially, consumers will be able to purchase dry goods and household items on-line and then have them ready for pick-up at the Whole Foods store where they inspect and select in-person their fruits and vegetables, fish, and meats.
The stock market responded positively to the news of Amazon’s acquisition.  Amazon founder Jeff Bezos’ share value increased by $1.8 billion last week.  His net worth is now estimated at $84.6 billion, and he is hot on the heels of Bill Gates, the world’s wealthiest person, at a net worth of $90 billion.  Unlike Bill Gates, however, Jeff Bezos has not yet signed up for the “Giving Pledge” that asks billionaires to give away half of their money during their lifetimes.  More than 150 billionaires have signed the Pledge thus far.
Even Nike is not immune to the accelerating trend away from retail shopping to on-line shopping.  Nike sales, particularly in North America, have suffered with the extinction of traditional sporting goods stores like Sports Authority. Nike announced last week that it is cutting more than 1,000 global jobs, two percent of its 70,000 person workforce, as part of a restructuring intended to strengthen sales. Nike will focus its strategy on key markets, digital sales, and fewer products.
Internationally, the center-left party of 39 year-old political phenomenon, newly elected French President Emmanuel Macron, won a clear majority in parliamentary elections this weekend.  La Republique en Marche (Republic on the Move) won more than the 289 seats required to control the National Assembly.
President Macron created the party just 18 months ago, and half of his party’s newly elected officials have no prior political experience.  Mr. Macron emphasized gender equality in his party’s candidate selection, which resulted in a 50:50 male to female ratio.
The political mandate enables President Macron to pursue his pro-EU, business-friendly reform plans including addressing France’s ten percent unemployment rate, reducing the bloated government budget by cutting the number of civil servants by 120,000, and reforming the French labor laws to encourage flexibility in hiring and streamlining and centralizing how unions negotiate.
Long anticipated BREXIT negotiations between Great Britain and the European Union commence today to chart the terms upon which Britain will leave the EU in March 2019.  Britain’s goal is to maintain maximum access to the single European market while regaining full control of the U.K’s borders so the country can manage immigration.  The EU’s position is that the four freedoms – free movement of goods, services, capital and people – are indivisible and if Britain wants to control its borders, it cannot have maximum access to the single market.
Finally, the eight-year Greek debt saga continues.  Last week the finance ministers of the Eurozone agreed to release the latest $9.6 billion tranche of the overall bailout of $96 billion, but they postponed any decision on the larger issue of restructuring the Greek debt burden.  While the risk of a GREXIT has diminished, the Greek economy has contracted by more than 25% since 2008 and more than 400,000 Greeks have left the country during this time.
For the week ending June 16th, the Standard & Poor’s 500 closed at 2,433, the Dow Jones Industrials at 21,384, and the Nasdaq Composite Index at 6,156.  The yield on the ten-year Treasury finished at 2.16%.  Oil was worth $44.74 per barrel, gold was worth $1,255 per ounce, and one Euro cost $1.12.
Ted Reagle
Financial Adviser
News and information presented here was gathered from sources believed, but not guaranteed to be reliable, including the Wall Street Journal, Bloomberg, BBC, Forbes, and businessinsider.com.  If you have any questions, please call us at 203.458.5220 or reply to this email. Thank you for your attention.  Elizabeth Cook is on vacation.