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Semiconductor industry

Stocks End Week Lower Amid Economic Data and Greece Crisis

Strategic Insights

— 2 min read

As the week came to a close, stocks retreated following the release of various economic data and the ongoing Greece crisis. The Labor Department reported a higher-than-expected U.S. jobs growth in May, with nonfarm payrolls increasing by 280,000. The unemployment rate rose to 5.5% from 5.4% in the previous month. Greece's Prime Minister Alexis Tsipras returned from Brussels without a deal for additional aid, but stated that a compromise is still within reach. Meanwhile, the International Monetary Fund cut its U.S. growth forecast, citing a stronger dollar, declining oil investment, and the West Coast port strike.

Key Takeaways:

  • The U.S. economy added 280,000 new jobs in May, exceeding expectations of 226,000, with the unemployment rate rising to 5.5% from 5.4%.
  • Greece's Prime Minister left Brussels without a deal for additional aid, but insisted that a compromise is possible, with the country bundling its loan repayments due in June into one payment of around $1.7B.
  • The International Monetary Fund reduced its U.S. growth forecast, citing a stronger dollar, declining oil investment, and the West Coast port strike.
  • The ECB kept its key interest rates unchanged, as expected, amidst ongoing negotiations with Greece's creditors and fellow euro nations.
  • The official manufacturing PMI in China rose to 50.2 from April's 50.1 reading, while the eurozone's manufacturing PMI came in at 52.2, but below the preliminary reading of 52.3.
  • Intel confirmed its plans to acquire Altera for $54 per share in an all-cash deal valued at about $16.7B, and T-Mobile US and DISH Network reported discussions on a potential merger.

Statistics:

  • 280,000: The number of new jobs added in May, exceeding expectations.
  • 5.5%: The unemployment rate, rising from 5.4% in the previous month.
  • 19.2%: The decline in the U.S. trade deficit in April to $40.9B, versus expectations for a deficit of $44B.
  • 50.2: The official manufacturing PMI in China, rising from 50.1 in April.
  • 52.2: The manufacturing PMI for the eurozone, falling short of the preliminary reading of 52.3.
  • $1.7B: The amount Greece plans to bundle in its loan repayments due in June into one end-of-month payment.
  • $54: The price per share Intel offered for Altera, in an all-cash deal valued at about $16.7B.

Sources:

  • TheFlyOnTheWall.com via COMTEX
  • Labor Department
  • International Monetary Fund
  • European Central Bank
  • Markit
  • Autodata
  • General Motors
  • Ford
  • PVH Corp.
  • Vera Bradley
  • Yahoo
  • Dow Jones
  • S&P 500
  • Nasdaq

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