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Clarksville Weekly Market Snapshot from Frazier Allen for the week of February 23rd, 2014

 

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – Poor weather continued to have an impact on the economic data. Residential construction and existing home sales fell more than anticipated in January. However, financial market participants seemed to be more willing to dismiss bad economic numbers (as being due to the weather) – U.S. markets also ignored turmoil in the Ukraine.

The CPI rose modestly in January, continuing a low trend. The new and improved Producer Price Report suggested relatively modest pipeline inflation pressures.

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The January 28th-29th FOMC minutes showed “a clear presumption” of a steady pace of tapering of Fed asset purchases (-$10 billion per month at each FOMC meeting), but officials noted that the pace could be altered if there were a “substantial” deviation from the economy’s expected path.

Officials agreed that the Fed’s forward guidance (on short-term interest rates) would have to be changed as the unemployment rate neared 6.5%, but there was no agreement about the form that such forward guidance would take. “A few” Fed officials thought it might be appropriate to raise the federal funds target rate “relatively soon.”

However, this was clearly a minority view, met with strong opposition from other Fed officials.

Next week, the economic data reports will remain subject to weather distortions. Fed Chair Janet Yellen will repeat her monetary policy testimony to the Senate Banking Committee. Given the passage of time (this hearing was postponed two weeks due to the weather), something new may come up in the Q&A, but the Senate generally gives the Fed chair an easier time than the House. The estimate of 4Q13 GDP growth is expected to be revised lower (to about 2.6%, from 3.2% in the advance estimate).

Indices

 

Last

Last Week

YTD return %

DJIA

16133.23

16027.59

-2.68%

NASDAQ

4267.55

4240.672

2.18%

S&P 500

1839.78

1829.83

-0.46%

MSCI EAFE

1908.55

1889.48

-0.37%

Russell 2000

1162.12

1147.79

-0.13%

Consumer Money Rates

 

Last

1-year ago

Prime Rate

3.25

3.25

Fed Funds

0.07

0.17

30-year mortgage

4.33

3.56

Currencies

 

Last

1-year ago

Dollars per British Pound

1.665

1.529

Dollars per Euro

1.370

1.334

Japanese Yen per Dollar

102.360

93.630

Canadian Dollars per Dollar

1.111

1.017

Mexican Peso per Dollar

13.283

12.677

Commodities

 

Last

1-year ago

Crude Oil

102.92

94.46

Gold

1315.67

1580.00

Bond Rates

 

Last

1-month ago

2-year treasury

0.32

0.34

10-year treasury

2.75

2.74

10-year municipal (TEY)

4.46

4.48

Treasury Yield Curve – 02/21/2014

Treasury Yield Curve – 02/21/2014

S&P Sector Performance (YTD) – 02/21/2014

S&P Sector Performance (YTD) – 02/21/2014

Economic Calendar

February 25th

 — 

Case-Shiller Home Prices (December)
Consumer Confidence (February)

February 26th

 — 

New Home Sales (January)

February 27th

 — 

Jobless Claims (week ending February 22nd)
Durable Goods Orders (January)

February 28th

 — 

Real GDP (4Q13, 2nd estimate)
Chicago Purchasing Managers Index (February)
Consumer Sentiment (February)
Yellen Monetary Policy Testimony (Senate Banking Committee)
Pending Home Sales (January)

March 3rd

 — 

ISM Manufacturing Index

March 7th

 — 

Employment Report (February)

March 19th

 — 

FOMC Policy Decision, Yellen 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 13th, 2013.

©2014 Raymond James Financial Services, Inc. member FINRA / SIPC.


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