Detroit Declares Bancruptcy; Markets Up

Financial News for the Week Ending July 20th

The S&P 500 ended the week at a new record high as comments by the Fed to soothe investors’ fears about their future moves combined with steadily positive economic news to drive the market. The S&P 500 rose 0.7% for the week and the Dow gained 0.5%. Internationally, Europe gained 1.2% and Japan was up 0.6% for the week. The yield on the 10 year Treasury bill has eased with the Fed’s comments and ended the week at 2.49% down from 2.61%. Oil continued to climb to reach $108.05 a barrel.

Detroit became the largest US city to declare bankruptcy after years of decline. The municipality has outstanding debt of over $18 billion. The move is likely to bring about years of legal wrangling.

Ben Bernanke, testifying before congress about the state of the economy, sought to reassure markets that the Fed did not intend to pull low interest rates away from the market for some time and would require several factors to come to pass before it did.

China’s rate of growth continued to decelerate in the second quarter as the country posted a 7.5% GDP. This is down from 7.7% in the first quarter.

Thirty year mortgage rates are up to 4.51%, over 1% higher they were at the beginning of May.

Retail sales rose just 0.4% in June below expectations and show consumers are still cautious.

The June CPI rose 0.5% for the largest jump in five months and slightly higher than expectations. The increase was primarily driven by rising gas prices.

Of the 104 companies to report earnings to date, 72% have topped analyst estimates, with financial institutions posting particularly strong results.

Reposted from the Raffa Wealth Management Blog.

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

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