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Weekly Market Snapshot from Frazier Allen for the week of February 10th, 2013

Posted By Frazier Allen On Sunday, February 10, 2013 @ 4:16 pm In Business | No Comments

Weekly Market Snapshot

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

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

Federal Reserve Governor Jeremy Stein fell short of declaring that credit markets are overheating, but suggested that an extended period of low interest rates could lead to the taking on of greater duration of credit risks, or to employment of greater leverage in a “reach for yield.” He said that the Fed must monitor the financial markets closely and could address signs of excessive risk-taking through regulatory efforts or through monetary policy.

Next week, President Barack Obama will deliver his State of the Union Address on Tuesday evening (which is also Mardi Gras). Most likely, the President will ask that Congress postpone the sequester through the end of the year. Note that it’s not costless to do so – there has to be an offsetting increase in revenues (possibly closed loopholes) or reduction in other types of spending (say, reduced farm subsidies). The reports on retail sales and industrial production have some market-moving potential, but seasonal adjustment could exaggerate what would otherwise be minor shifts in the data.

Indices

  Last Last Week YTD return %
DJIA 13944.05 13860.58 6.41%
NASDAQ 3165.13 3142.13 4.82%
S&P 500 1509.39 1498.11 5.83%
MSCI EAFE 1661.10 1687.33 3.56%
Russell 2000 908.10 902.09 6.92%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.15 0.10
30-year mortgage 3.53 3.87

Currencies

  Last 1-year ago
Dollars per British Pound 1.570 1.590
Dollars per Euro 1.340 1.326
Japanese Yen per Dollar 93.490 76.870
Canadian Dollars per Dollar 0.999/td> 0.995
Mexican Peso per Dollar 12.711 12.629

Commodities

  Last 1-year ago
Crude Oil 95.83 98.41
Gold 1671.25 1746.45

Bond Rates

  Last 1-month ago
2-year treasury 0.25 0.25
10-year treasury 1.96 1.90
10-year municipal (TEY) 3.09 3.05

Treasury Yield Curve – 02/08/2013

Treasury Yield Curve – 02/08/2013 [1]

S&P Sector Performance (YTD) – 02/08/2013

S&P Sector Performance (YTD) – 02/08/2013 [2]

Economic Calendar

February 12th

 —

State of the Union Address
February 13th

 —

Import Prices (January)
Retail Sales (January)
February 14th

 —

Jobless Claims (week ending February 9th)
Retail Sales (January)
February 15th

 —

Industrial Production (January)
February 18th

 —

Presidents Day Holiday (markets closed)
February 20th

 —

FOMC minutes (January 29th-30th)
February 28th

 —

Real GDP (4Q12, 2nd estimate)
March 8th

 —

Employment Report (February)
March 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.

[4]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 February 7th, 2013.

©2013 Raymond James Financial Services, Inc. member FINRA [5] / SIPC [6].


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