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The Weekly Market Snapshot from Frazier Allen for the week of September 23rd, 2012

 

Weekly Market Snapshot

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

Scott J. Brown Ph.D., Chief Economist Raymond James Investment ServicesThe economic data were mixed. Homebuilder sentiment continued to improve. Existing home sales rose 7.9% in August (+24.5% y/y). Housing starts and building permits were mixed in August, but continued to reflect an improving trend in single-family construction (permits up 19.3% y/y). The Fed’s two key regional manufacturing surveys were mixed, but remained weak.

Intraday volatility increased in the stock market as investors tried to weigh the Fed’s recent actions (and promise to do more if need) against the near-term headwinds and downside risks.

Next week, the financial markets could react to any surprises in the reports on consumer confidence and durable goods orders. Little change is expected in the third estimate of 2Q12 GDP growth (“ancient history” at this point). However, Friday’s personal income and spending figures, while not a major market-mover, will help fill in the picture for 3Q12 GDP growth.

Given the Fed’s emphasis on the job market, financial market participants are likely to look ahead to the September Employment Report (due October 5th).

Indices

  Last Last Week YTD return %
DJIA 13596.93 13539.86 11.29%
NASDAQ 3175.96 3155.83 21.91%
S&P 500 1460.26 1459.99 16.11%
MSCI EAFE 1545.77 1531.29 9.43%
Russell 2000 851.51 856.12 14.93%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.16 0.10
30-year mortgage 3.51 4.13

Currencies

  Last 1-year ago
Dollars per British Pound 1.619 1.572
Dollars per Euro 1.294 1.368
Japanese Yen per Dollar 78.310 76.500
Canadian Dollars per Dollar 0.978 0.993
Mexican Peso per Dollar 12.913 13.198

Commodities

  Last 1-year ago
Crude Oil 91.87 86.89
Gold 1768.70 1803.13

Bond Rates

  Last 1-month ago
2-year treasury 0.26 0.26
10-year treasury 1.77 1.67
10-year municipal (TEY) 3.18 3.11

Treasury Yield Curve – 9/21/2012

Treasury Yield Curve – 9/21/2012

S&P Sector Performance (YTD) – 9/21/2012

S&P Sector Performance (YTD) – 9/21/2012

Economic Calendar

September 25th

 —

S&P/Case-Shiller Home Price Index (July)
Consumer Confidence (September)
September 26th

 —

New Home Sales (August)
September 27th

 —

Jobless Claims (week ending September 22nd)
Real GDP (2Q12, 3rd estimate)
Durable Goods Orders (August)
Pending Home Sales Index (August)
September 28th

 —

Personal Income and Spending (August)
Chicago Purchasing Managers Index (September)
Consumer Sentiment (September)
October 1st

 —

ISM Manufacturing Index (September)
October 3rd

 —

First Presidential Debate
October 5th

 —

Employment Report (September)
October 24th

 —

FOMC Policy Meeting (no 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 September 20th, 2012.

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


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