● US Airstrike in Libya Targets Planner of 2013 Algeria Attack | NY Times
● US Consumer sentiment rebounds in early June | CNBC
● U.S. Producer Prices Climb as Oil Stabilizes | WSJ
● Greece Enters Fateful Week as Brussels Talks End Fruitlessly | Bloomberg
● U.S. gas prices rise but appear to be peaking: survey | Reuters
● Eurozone merchandise exports rise 9% in April 2015 vs. year ago | Eurostat

US industrial production is expected to increase 0.1% in tomorrow’s May report vs. the previous month, according to The Capital Spectator’s average point forecast for several econometric estimates. The average prediction represents a modest rebound from April’s 0.3% decline.
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● The Next Financial Crisis and How to Save Capitalism
By Hossein Askari and Abbas Mirakhor
Summary via publisher (Palgrave Pivot)
The financialization of the economy – the rapid growth of the financial sector relative to the real sector and their decoupling – has brought a number of interrelated problems which have contributed to growing income and wealth inequality. In this work, Hossein Askari and Abbas Mirakhor assert that it is time to make a bold change by putting our financial house in order and on a better path. Patchwork solutions such as higher capital requirements for banks and better regulations, supervision and enforcement are important, but at best they will only delay another inevitable financial crisis with devastating fallouts. The authors identify the prevalence of debt financing as the heart of the problem, and advocate for a fundamental reform of the financial system that reduces the supremacy of debt and increases the fraction of reserves in fractional reserve banking.
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Should we continue to consider the weekly jobless claims data as one of the more “reliable” leading indicators of the US business cycle? If the answer is “yes” — as it should be — then yesterday’s update continues to offer an encouraging outlook for the economy. Although new filings for unemployment benefits ticked up by 2,000 in the first week of June to a seasonally adjusted 279,000, that’s close to a 15-year low. In other words, the implied forecast remains upbeat for the labor market and, by extension, the US macro profile.
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● US retail sales jump in a sign of more confident consumers | USN&WR
● US jobless claims inch up to 279,000 in first week of June | MarketWatch
● Consumer Comfort in US Falls for a Record 9th Straight Week | Bloomberg
● US business inventories post largest gain in nearly a year | Reuters
● Eurozone Industrial Production Growth At 3-month Low In April | RTT
● IMF walks out of Greek creditor negotiations | The Independent
● Keeping Greece in Euro May Be Unrelated To Finances | Bloomberg

Retail sales revived last month, rising 1.2% in May, according to this morning’s monthly report from the US Census Bureau. The monthly advance represents a substantial improvement over April’s sluggish 0.2% increase. The news provides support for projecting that US economic growth in the second quarter won’t repeat the weak run in Q1.
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US Treasury yields continued to rise yesterday, with the rate on the benchmark 10-year Note reaching 2.50%–the highest level since last September, based on data from Treasury.gov. Meanwhile, the 2-year yield—considered the most sensitive spot on the yield curve for rate expectations—ticked up to a four-year high of 0.75% on Wednesday (June 10).
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● U.S. Mortgage Applications Surge 8% in Advance of Rate Hikes | WPJ
● U.S. Annual Budget Deficit Smallest in Nearly 7 Years | WSJ
● Bond crash across the world as deflation trade goes horribly wrong | Telegraph
● World Bank Lowers Global Growth Outlook, Urges Fed To Delay Rate Hike | RTT
● S&P downgrades Greece after IMF repayment delayed | Reuters
● Greece bailout talks: stocks surge on rumours of German compromise | Guardian

US retail sales are expected to increase 0.5% in tomorrow’s May report vs. the previous month, according to The Capital Spectator’s average point forecast for several econometric estimates. The mean prediction reflects a modest improvement vs. the previous month’s flat performance. Recent surveys of economists, by contrast, project a substantially stronger rate of growth for retail spending in May.
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Vanguard founder John Bogle tells Benzinga that he expects a long-term nominal return on the US stock market of roughly 7.0% a year, based on a current dividend yield of around 2.0 percent plus expected earnings growth of 5.0%. In the years ahead, however, he thinks that the market’s valuation will slide to a price-earnings ratio of 15 from the current 20, which pares the near-term return forecast to around 4.0%. But it gets worse. “When you factor in the costs associated with index funds, inflation, and taxes, you are actually looking at real returns of nominal to zero,” Bogle said.
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