The Weekly Market Snapshot from Frazier Allen for the week of December 9th, 2012

By Frazier Allen | December 9, 2012 |

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

The economic data were mixed. The ISM Manufacturing Index weakened. Unit autos sales roared back in November from the Sandy-related decline in October. The Employment Report was moderate. Nonfarm payrolls rose by 146,000, more than expected, but the two previous months were revised a net 49,000 lower.

The unemployment rate fell to 7.7% (from 7.9%), but the drop was due entirely to a drop in labor force participation. The Bureau of Labor Statistics said that Hurricane Sandy did not have a significant impact on the numbers, but details of the Household Survey showed a spike in the number of people unable to get to work due to adverse weather.

Next week, the focus is expected to be on the Fed policy meeting. The Federal Open Market Committee is widely expected to announce that it will add Treasury purchases to QE3 beginning in 2013. The Fed is currently buying $45 billion per month in long-term Treasury as part of Operation Twist, financed by sales of short-term Treasuries out of its portfolio (leaving the size of the balance sheet unchanged).

In QE3, the Fed would finance such purchases with newly created money. Fed officials will debate whether to add economic thresholds to its forward guidance (such as a specific level of unemployment), but any changes to the guidance would more likely be made at a future meeting. Inflation figures will reflect lower gasoline prices. November retail sales and industrial production are expected to rebound from Sandy’s hit to the October figures.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 12/7/2012

S&P Sector Performance (YTD) – 12/7/2012

Economic Calendar

Important Disclosures

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 November 29th, 2012.

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

About Frazier Allen

Sections

Topics

Comments

You must be logged in to post a comment.

Connect with:

Enter your WordPress.com blog URL

http://.wordpress.com

Proceed

© 2006-2010 Clarksville, TN Online is owned and operated by residents of Clarksville Tennessee.
» We are Hosted by Compu-Net Enterprises; In Partnership with Discover Clarksville and Discover Paris