● US industrial output hurt by weakness in manufacturing, mining | Reuters
● NY Fed Manufacturing Index Unexpectedly Falls in June | WSJ
● US manufacturing sector said to be in a technical recession | MarketWatch
● US Housing Market Index Jumps To Nine-Month High In June | RTT
● UK Inflation Turns Positive In May | RTT
● ZEW: German economic sentiment hits 5-month low | MarketWatch

Housing starts are expected to total 1.083 million units (seasonally adjusted annual rate) in tomorrow’s update for May, according to The Capital Spectator’s average point forecast for several econometric estimates. The projection represents a moderate decline in residential construction vs. April.
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The US equity market has regained front-runner status for the trailing one-year return (250 trading days) among the major asset classes, but the edge is looking considerably less impressive compared with the glory days of recent years. In fact, rolling one-year returns overall are a diminished lot lately, based on our standard set of ETF proxies that track broad measures of the global opportunity set. There are fewer positive returns for the trailing 250-day period while the performance histories that are still in the black reflect relatively modest gains  vs. recent history. In short, earning a risk premium isn’t getting any easier.
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● 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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