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The Weekly Market Snapshot from Frazier Allen

Weekly Market Snapshot

Market Commentary by Scott J. Brown, Ph.D., Chief Economist

Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services
Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services

Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services

The economic data remained consistent with a moderate pace of economic expansion. Retail sales rose 0.6% in December, up 0.5% excluding autos, boosted somewhat by higher gasoline prices. Industrial production rose 0.8%, aided by colder temperatures (utility output up 4.3%, manufacturing up 0.4%). As anticipated, headline inflation figures were boosted by higher energy prices in December and the impact was magnified by the season adjustment. The Consumer Price Index rose 1.5% in the 12 months ending in December, up just 0.8% ex-food & energy (vs. the Federal Reserve’s implicit goal of around 2%). Jobless claims jumped, but the figures are normally choppy during this time of year (due to difficulties in the seasonal adjustment).

Investors reacted to the mix of economic data and kept an eye on the European debt situation.

Next week, there are a handful of potentially market-moving data releases. However, residential construction and home sales figures should not be important, as December is not a big month for housing activity (the bigger test will come in the spring). The LEI should post another strong gain.

Indices

  Last Last Week YTD return %
DJIA 11731.9 11697.31 1.33%
NASDAQ 2735.29 2709.89 3.11%
S&P 500 1283.76 1273.85 2.08%
MSCI EAFE 1692.31 1648.65 2.05%
Russell 2000 800.65 791.42 2.17%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.18 0.11
30-year mortgage 4.76 5.23

Currencies

  Last 1-year ago
Dollars per British Pound 1.586 1.628
Dollars per Euro 1.336 1.450
Japanese Yen per Dollar 82.710 91.370
Canadian Dollars per Dollar 0.987 1.031
Mexican Peso per Dollar 12.115 12.755

Commodities

  Last 1-year ago
Crude Oil 91.40 79.65
Gold 1384.47 1133.47

Bond Rates

  Last 1-month ago
2-year treasury 0.58 0.64
10-year treasury 3.27 3.40
10-year municipal (TEY) 5.26 4.97

Treasury Yield Curve – 1/14/2011 

Treasury Yield Curve – 1/14/2011

S&P Sector Performance (YTD) – 1/14/2011 

S&P Sector Performance (YTD) – 1/14/2011

Economic Calendar

January 17th  —  Martin Luther King, Jr. Holiday (markets closed)
January 18th  —  Empire State Manufacturing Index (January)
Homebuilder Sentiment (January)
January 19th  —  Building Permits, Housing Starts (December)
January 20th  —  Jobless Claims (week ending January 15th)
Existing Home Sales (December)
Leading Economic Indicators (December)
Philadelphia Fed Index (January)
January 25th/26th  —  FOMC Meeting
January 28th  —  Real GDP (4Q11, advance estimate)
February 2nd  —  State of the Union Address (also, Groundhog’s Day)

Important Disclosures

Past performance is not a guarantee of future results. There are special risks involved with global investing related to market and currency fluctuations, economic and political instability, and different financial accounting standards. The above material has been obtained from sources considered reliable, but we do not guarantee that it is accurate or complete. There is no assurance that any trends mentioned will continue in the future. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Investing involves risk and investors may incur a profit or a loss.

US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the US government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments.

Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.

Material prepared by Raymond James for use by its financial advisors.

The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business January 13th, 2010.

©2010 Raymond James Financial Services, Inc. member FINRA / SIPC.

Frazier Allen
Frazier Allenhttp://www.raymondjames.com/frazierallen
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank 50 Franklin Street | Clarksville, TN 37040 | 931-553-2048
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