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The Weekly Market Snapshot from Frazier Allen for the week of September 11th

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

Worries about a meltdown in Europe contributed to weakness in U.S. equities and helped drive Treasury yields lower. The European Central Bank left short-term interest rates unchanged. In the post policy meeting press conference, ECB President Trichet continued to talk tough on inflation, but noted “particularly high uncertainty and intensified downside risks” to the growth outlook. An ECB official was said to have resigned over the decision by the ECB to buy Italian and Spanish bonds. Market participants feared a potential default in Greece.

The U.S. economic calendar was thin, but reports remained consistent with the notion of subpar economic growth in the near term. Bernanke repeated that the Fed has “a range of tools to that could be used to provide additional monetary stimulus,” but the markets were disappointed that he didn’t provide details (actually, he doesn’t know – the Federal Open Market Committee will debate the possible costs and benefits of its various tools at the September 20-21 policy meeting).

President Obama unveiled a plan to boost jobs (price tag: near $450 billion) and laid it in the lap of Congress (in his speech to a joint session of Congress, he said “pass this plan,” or some variation, 18 times). The plan would more than offset the current expected fiscal drag on the economy next year, but it’s unclear whether it can make it through Congress and how it will be paid for.

Next week, Europe will remain an important factor for investors. There will also be a deluge of economic data reports. The focus is likely to be on the retail sales and CPI numbers, which could have some impact on what the Fed does the following week.

Indices

  Last Last Week YTD return %
DJIA 11295.81 11493.57 -2.43%
NASDAQ 2529.14 2546.04 -4.66%
S&P 500 1185.90 1204.42 -5.70%
MSCI EAFE 1453.64 1521.62 -12.34%
Russell 2000 694.92 708.92 -11.32%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.12 0.13
30-year mortgage 4.18 4.49

Currencies

  Last 1-year ago
Dollars per British Pound 1.600 1.549
Dollars per Euro 1.393 1.275
Japanese Yen per Dollar 77.460 83.920
Canadian Dollars per Dollar 0.986 1.035
Mexican Peso per Dollar 12.507 12.991

Commodities

  Last 1-year ago
Crude Oil 89.05 74.67
Gold 1854.68 1255.70

Bond Rates

  Last 1-month ago
2-year treasury 0.18 0.19
10-year treasury 1.99 2.27
10-year municipal (TEY) 3.21 3.54

Treasury Yield Curve – 9/09/2011

 

S&P Sector Performance (YTD) – 9/09/2011

 S&P Sector Performance (YTD) – 9/09/2011

Economic Calendar

September 13th

 — 

Small Business Optimism (August)
Import Prices (August)
September 14th

 — 

Producer Price Index (August)
Retail Sales (August)
September 15th

 — 

Jobless Claims (week ending September 10th)
Consumer Price Index (August)
Empire State Manufacturing Index (September)
Industrial Production (August)
Philadelphia Fed Index (September)
September 16th

 — 

Consumer Sentiment (mid-September)
September 20th

 — 

Building Permits, Housing Starts (August)
FOMC Meeting Begins
September 21st

 — 

FOMC Policy Meeting (no press briefing)
September 22nd

 — 

Leading Economic Indicators (August)
October 7th

 — 

Employment Report (September)
October 10th

 — 

Columbus Day (bond market closed)

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 September 8th, 2011.

©2011 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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