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Clarksville Weekly Market Snapshot from Frazier Allen for the week of March 2nd, 2014

 

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – There were relatively few surprises in the economic data reports. Real GDP rose at a 2.5% annual rate in the 2nd estimate for 4Q13 (vs. +3.2% in the advance estimate).

Consumer spending was not as strong as estimated earlier, but was still respectable (a +2.6% pace, vs. +3.3%). Business fixed investment was revised higher (+7.3%, vs. +3.8%).

Frazier Allen

Frazier Allen

Government subtracted more than a full percentage point from GDP growth (partly reflecting the government shutdown).

Inventories rose less than estimated earlier, but still faster than in the third quarter (inventory growth ought to slow, subtracting from GDP growth, in the first half of 2014).

New home sales bucked the recent trend of weather-related weakness in January, but that’s largely because more than 80% of sales come from the South and the West.

In the second round of her monetary policy testimony (delayed two weeks because of the weather) Fed Chair Yellen once again did not rock the boat. Deviating briefly from her written testimony, Yellen recognized that much of the recent softness in the economic data has been weather-related, but she added that it was difficult to say exactly how much.

While not on a preset course, the tapering of asset purchases is expected to proceed “in measured steps” (-$10 billion per policy meeting) unless there is a significant change in the economic outlook.

The stock market seemed to be looking for good news, and embraced the minor positive aspects of the economic data reports and Yellen’s testimony. The stock market, which often “climbs a wall of worry,” ignored turmoil overseas (Ukraine’s politics, China’s economy).

Next week, the ISM Manufacturing Index is likely to rebound from weather effects, setting the tone for the week. However, the February Employment Report will carry more weight. We may see a rebound from January’s weather (teachers and bus drivers, retail), but a moderate pace of payroll growth otherwise. The unemployment rate is expected to hold steady at 6.6%, but the trend is clearly lower.

Indices

  Last Last Week YTD return %
DJIA 16272.65 16133.23 -1.83%
NASDAQ 4318.93 4267.55 3.41%
S&P 500 1854.29 1839.78 0.32%
MSCI EAFE 1923.34 1908.55 0.40%
Russell 2000 1187.94 1162.12 2.09%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.06 0.16
30-year mortgage 4.37 3.51

Currencies

  Last 1-year ago
Dollars per British Pound 1.668 1.514
Dollars per Euro 1.371 1.310
Japanese Yen per Dollar 102.090 91.860
Canadian Dollars per Dollar 1.114 1.025
Mexican Peso per Dollar 13.303 12.796

Commodities

  Last 1-year ago
Crude Oil 102.40 92.76
Gold 1333.98 1597.60

Bond Rates

  Last 1-month ago
2-year treasury 0.34 0.33
10-year treasury 2.69 2.66
10-year municipal (TEY) 4.42 4.45

Treasury Yield Curve – 02/28/2014

Treasury Yield Curve – 02/28/2014

S&P Sector Performance (YTD) – 02/28/2014

S&P Sector Performance (YTD) – 02/28/2014

Economic Calendar

March 3rd

 —

Personal Income and Spending (January)
ISM Manufacturing Index (February)
Motor Vehicle Sales (February)
March 4th

 —

Mardi Gras
March 5th

 —

ADP Payroll Estimate (February)
ISM Non-Manufacturing Index (February)
Fed Beige Book
March 6th

 —

Jobless claims (week ending March 1st)
March 7th

 —

Employment Report (February)
Trade Balance (January)
March 12th

 —

NCAA tournament begins
March 13th

 —

Retail Sales (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 27th, 2013.

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


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