The unexpected defeat of the US House majority leader Eric Cantor by a tea party candidate in a Republican primary raised concerns about increased gridlock in Washington.  Also, advances in Iraq by ISIS, a group disowned by Al Qaeda for being too violent, caused a rise in oil prices and shocked the markets.  Overall, stocks fell this past week.  Treasuries were largely unchanged and oil rose.

• The World Bank cut its forecast of global growth this year from 3.2% to 2.8%.  The harsh US winter and the Ukraine crisis were cited as reasons for the reduced forecast.
• Initial claims for unemployment rose to 317,000 in the prior week from a revised 313,000 the week before.  This was higher than predictions for 310,000.  The four week moving average designed to smooth out weekly fluctuations also rose to 315,250.
• Retail sales rose 0.3% in May.  Excluding automotive retail sales rose only 0.1%.  Excluding both autos and gasoline, retail sales were flat and worse than expectations.  From a year ago May’s sales rose 4.3%.  April retail sales were revised up from 0.1% to 0.5%.
• Business inventories in April increased 0.6%.