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Weekly Market Snapshot from Frazier Allen for the week of February 20th, 2013

By | February 20, 2013 | Print This Post
 

Weekly Market Snapshot

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

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

In his State of the Union Address, President Obama proposed various efforts to boost manufacturing jobs, universal pre-K education and an increase in the minimum wage. However, there’s little chance that any of these proposals will make it to the floor of the House.

The economic data were mixed. Retail sales rose a modest 0.1% in January. Industrial production slipped 0.1%, but figures for November and December were revised higher. The New York Fed’s Empire State Manufacturing Index and the mid-February reading on consumer sentiment surprised to the upside.

Amid concerns about a possible currency war (a series of competitive devaluations), the G-7 finance ministers and central bankers issued a statement reaffirming a commitment to market-determined exchanged rates. However, there was immediate confusion as to whether the statement signaled approval for Japan or a warning. Japan and the euro area reported declines in GDP in the fourth quarter. However, a few recent indicators suggest some improvement in early 2013.

Next week, the major item is likely to be the Fed’s policy meeting minutes from January. In December, several FOMC members “thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet.” That debate likely continued at the January policy meeting. None of that should be a surprise to anyone, but news quotes from the minutes could rattle the markets on Wednesday.

Indices

  Last Last Week YTD return %
DJIA 13973.39 13944.05 6.63%
NASDAQ 3198.66 3165.13 5.93%
S&P 500 1521.38 1509.39 6.67%
MSCI EAFE 1672.63 1661.10 4.28%
Russell 2000 923.76 908.10 8.76%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.17 0.13
30-year mortgage 3.53 3.87

Currencies

  Last 1-year ago
Dollars per British Pound 1.549 1.568
Dollars per Euro 1.334 1.312
Japanese Yen per Dollar 93.090 78.420
Canadian Dollars per Dollar 1.002/td> 1.000
Mexican Peso per Dollar 12.690 12.785

Commodities

  Last 1-year ago
Crude Oil 97.31 100.74
Gold 1634.50 1716.07

Bond Rates

  Last 1-month ago
2-year treasury 0.27 0.25
10-year treasury 2.03 1.84
10-year municipal (TEY) 3.07 2.92

Treasury Yield Curve – 02/15/2013

Treasury Yield Curve – 02/15/2013

S&P Sector Performance (YTD) – 02/15/2013

 S&P Sector Performance (YTD) – 02/15/2013

Economic Calendar

February 18th

 —

 Presidents Day Holiday (markets closed)
February 19th

 —

 Homebuilder Sentiment (February)
February 20th

 —

 Producer Price Index (January)
Building Permits, Housing Starts (January)
FOMC minutes (January 29th-30th)
February 21st

 —

 Jobless Claims (week ending February 16th)
February 26th

 —

 Consumer Confidence (February)
Bernanke Monetary Policy
February 27th

 —

 Durable Goods Orders (January)
February 28th

 —

 Real GDP (4Q12, 2nd estimate)
March 1st

 —

 Personal Income, Spending (January)
ISM Manufacturing Index (February)
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.

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 14th, 2013.

©2013 Raymond James Financial Services, Inc. member FINRA / SIPC.


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