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The Weekly Market Snapshot from Frazier Allen for the week of April 22nd, 2012

 

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

Europe remained a key concern for U.S. investors. Spain’s debt auction went better than feared. Global investors expressed some concerns about France’s election (first round on April 22nd, second round on May 6th). In its World Economic Outlook, the IMF revised its outlook for global growth slightly higher, but cautioned that “recent improvements are very fragile.”

The U.S. economic data were mixed. Retail sales were stronger than expected in March. Existing home sales and industrial production were weaker than anticipated. Residential construction figures were mixed (permits up, starts down), but first quarter figures were stronger than a year ago (likely aided by a mild winter). Weekly jobless claims were higher than expected, but seasonal adjustment at the start of the quarter is difficult, making recent figures appear suspect.

Next week, the focus is expected to be on the Fed policy meeting, although earnings reports, European developments, and Friday’s GDP Report will likely have some influence on the markets. No monetary policy changes are expected following the Federal Open Market Committee – no change in rates, no change in the conditional commitment to keep rates exceptionally low into late 2014, and no further asset purchase plans (QE3).

Fed officials will revise their forecasts of growth, unemployment and inflation, as well as the expected date that the Fed will start raising the federal funds rate target. Real GDP is expected to have risen at close to a 2.6% annual rate, although there is always a lot of uncertainty in the advance estimate (inventories and net exports account for a small part of GDP, but a disproportional amount of the quarterly variation of GDP growth).

Indices

  Last Last Week YTD return %
DJIA 12964.10 12986.58 6.11%
NASDAQ 3007.56 3055.55 15.45%
S&P 500 1376.92 1387.57 9.49%
MSCI EAFE 1502.34 1506.27 6.36%
Russell 2000 798.90 808.59 7.83%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.13 0.11
30-year mortgage 3.86 4.78

Currencies

  Last 1-year ago
Dollars per British Pound 1.605 1.632
Dollars per Euro 1.312 1.432
Japanese Yen per Dollar 81.500 82.430
Canadian Dollars per Dollar 0.994 0.957
Mexican Peso per Dollar 13.214 11.678

Commodities

  Last 1-year ago
Crude Oil 102.27 108.15
Gold 1639.93 1496.50

Bond Rates

  Last 1-month ago
2-year treasury 0.27 0.35
10-year treasury 1.98 2.24
10-year municipal (TEY) 4.15 3.66

Treasury Yield Curve – 4/20/2012

Treasury Yield Curve – 4/20/2012

S&P Sector Performance (YTD) – 4/20/2012

S&P Sector Performance (YTD) – 4/20/2012

Economic Calendar

April 24th

 —

S&P/Case-Shiller Home Price Index (February)
New Home Sales (March)
Consumer Confidence (April)
FOMC Meeting Begins
April 25th

 —

Durable Goods Orders (March)
FOMC Policy Decision
Bernanke Press Briefing
April 26th

 —

Jobless Claims (week ending April 21st)
Pending Home Sales Index (March)
April 27th

 —

Employment Cost Index (1Q12)
Real GDP (1Q12, advance estimate)
Consumer Sentiment (April)
May 4th

 —

Employment Report (April)
June 20th

 —

FOMC Policy Decision
Bernanke Press Briefing

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 April 19th, 2012.

©2012 Raymond James Financial Services, Inc. member FINRA / SIPC.


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