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Clarksville Weekly Market Snapshot from Frazier Allen for the week of January 19th, 2014

 

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – There were few surprises in the economic data reports. Retail sales, industrial production, and the Consumer Price Index were all relatively close to expectations. Retail sales slowed in December, reflecting a pullback in unit auto sales, up moderately otherwise (weakness in department store sales were offset by stronger e-tail activity).

Industrial production rose 0.3%, held back by a drop in the output of utilities, but factory output accelerated in 4Q13, following a soft trend in the first three quarters of 2013 (consistent with improving trends in factory payrolls and new orders). Residential construction figures disappointed, but it’s hard to get too worked up about December data (which can be exaggerated due to the weather and seasonal adjustment).

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With his time as Fed chairman ticking down, Ben Bernanke again defended the Fed’s actions during the financial crisis and the extraordinary policy measures undertaken since. He seems very happy on his way out the door, and little change should be expected from Janet Yellen.

Next week, Monday’s a holiday and the economic calendar is thin. None of the reports is going to have an impact on the bigger economic picture. Investors are likely to look ahead to the next couple of weeks. The recent economic data, while mixed, are unlikely to prevent the Fed from tapering the pace of asset purchases further (expect another $10 billion reduction).

Fed officials expect growth to pick up in 2014. They could slow the rate of tapering if the economic data weaken, but officials see asset purchases as less effective and more risky the longer they last. Tapering need not lead to tears (higher bond yields), as the Fed continues to emphasize that short-term rates are going to remain low for a long time

Indices

  Last Last Week YTD return %
DJIA 16417.01 16444.76 -0.96%
NASDAQ 4218.69 4156.19 1.01%
S&P 500 1845.89 1838.13 -0.13%
MSCI EAFE 1916.40 1892.69 0.04%
Russell 2000 1173.13 1158.35 0.82%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.07 0.27
30-year mortgage 4.50 3.38

Currencies

  Last 1-year ago
Dollars per British Pound 1.634 1.599
Dollars per Euro 1.359 1.328
Japanese Yen per Dollar 104.400 88.510
Canadian Dollars per Dollar 1.092 0.986
Mexican Peso per Dollar 13.284 12.635

Commodities

  Last 1-year ago
Crude Oil 93.96 94.24
Gold 1241.29 1680.45

Bond Rates

  Last 1-month ago
2-year treasury 0.38 0.39
10-year treasury 2.84 2.94
10-year municipal (TEY) 4.49 4.46

Treasury Yield Curve – 01/17/2014

Treasury Yield Curve – 01/17/2014

S&P Sector Performance (YTD) – 01/17/2014

S&P Sector Performance (YTD) – 01/17/2014

Economic Calendar

January 20th

 —

MLK, Jr. Holiday (markets closed)
January 23rd

 —

Jobless Claims (week ending January 18th)
Existing Home Sales (December)
Leading Economic Indicators (December)
January 27th

 —

New Home Sales (December)
January 28th

 —

Durable Goods Orders (December)
Consumer Confidence (January)
State of the Union Address
January 29th

 —

FOMC Policy Decision, no press briefing
January 30th

 —

Real GDP (4Q13, advance estimate)
Pending Home Sales Index (December)
January 31st

 —

Personal Income and Spending (January)

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 January 16th, 2013.

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


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