Stocks sharply higher: Positive reaction to news of a plan to centralize banking regulations in Europe. Dow is up 210 points.
Bailout help in Europe: The idea is to recapitalize banks without adding to the sovereign debt of countries, which has been a problem for Spain and potentially for Italy. From the NYT:
Graham Neilson, chief investment strategist at Cairn Capital, an asset management and investment company in London, noted that while the agreement represented some progress, some fundamental issues were not addressed. "The burden of future risk is being shared more widely, meaning the chances of a euro zone breakup have been lowered for the short term," he said. "But at the same time, the longer-term ante is higher for all involved and the root causes of the structural imbalances remain."
Consumer spending is flat: Disappointing numbers for May because consumers represent so much of the economy. One explanation: Wage growth was basically unchanged from April. (AP)
Drop in consumer sentiment: The Thomson Reuters/University of Michigan index is at its lowest level since December - and short of economists' expectations. From Reuters:
The deterioration in consumers' attitudes came mostly from households with incomes over $75,000; sentiment among lower-income households was little changed, the survey said. "While the overall level of consumer sentiment is substantially above last summer's low - which would normally indicate a growth slowdown, not a downturn - the buying plans of upper-income households have also sharply declined," survey director Richard Curtin said in a statement. "Since these households account for a large share of total spending, if the declines continue in the months ahead, it could have a substantial impact on total spending."
Plummeting gas prices: Just in time for the holiday - an average gallon of regular in the L.A. area is $3.793, according to the Auto Club, down 13.2 cents from last week and 51 cents from last month.
Big day for L.A. transit: Congress is expected to finally approve a transportation bill that includes a federal loan program for major projects, such as the L.A. subway expansion. From the LAT:
If the measure becomes law, Metro is expected to be among the first to apply to the U.S. Transportation secretary for a chunk of nearly $17 billion in loans expected to be made available nationally under an expansion of the Transportation Infrastructure Finance and Innovation Act program. "The staff is prepared to move with dispatch," said Raffi Hamparian, Metro director of federal affairs, predicting movement "within a matter of months." But the loans, which Metro proposes to repay from a half-cent sales tax approved by county voters in 2008, won't be enough for the mayor to deliver on his goal of building a dozen transit lines in 10 years instead of 30.
Small boost for film subsidy: A state Senate panel approved a two-year extension of the tax credit program for producing movies and television shows. Proponents had sought a five-year extension. A similar bill is being considered in the Assembly. (THR)
Huge payday for JP Morgan executive: Outgoing Chief Investment Officer Ina Drew, who oversaw the London traders responsible for losses on credit derivatives that could run as high as $9 billion, will walk away with about $21.5 million in stock and options. (Bloomberg)
Jordan Downs to be made over: L.A.'s housing authority has chosen developers to tear down the crime-plagued housing project and replace it with a mixed-use "urban village" that would include homes, stores and a park. From the LAT:
Significant questions remain about how the project will be financed. The housing authority has about $15 million in federal housing replacement funds and has identified some other funding sources, but officials said many details must still be worked out. Kim McKay, the executive vice president of Bridge, said officials expect to "cobble together a lot of different colors of money," probably including tax credits.
Jan Perry says no to Walmart money too: The L.A. City Councilwoman and mayoral candidate joins Controller Wendy Greuel and City Councilman Eric Garcetti, also candidates for mayor, in turning down contributions from the retail giant. (KPCC)