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Clarksville Weekly Market Snapshot from Frazier Allen for the week of April 3rd, 2014

 

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The economic data reports were mixed and mostly ignored by the financial markets. Real GDP rose at a 2.6% annual rate in the 3rd estimate for 4Q13 (vs. +2.4% in the second estimate and +3.2% in the advance estimate).

Most of the story remained that same. Government subtracted a full percentage point from overall growth, but that was offset by a narrower trade deficit (which added a percentage point).

Frazier Allen

Frazier Allen

Inventory accumulation remained very brisk, although slightly slower than in 3Q13. However, consumer spending was revised to a 3.3% annual rate (vs. +2.6% in the 2nd estimate and +3.3% in the advance estimate), with most of that revision in healthcare.

Personal income and spending rose about as expected in February, although the PCE Price Index, the Fed’s chief gauge of inflation, rose 0.9% y/y overall and +1.1% y/y ex-food & energy (vs. the Fed’s official goal of 2.0%).

Looking ahead, most of the economic data reports for March and April are expected to reflect a rebound from adverse weather in January and February. Hence, the numbers may make growth look stronger than it really is. As a simple rule, one can take the average of recent months to approximate the underlying trend.

Next week, fresh March figures will arrive. The focus is likely to be on the ISM Manufacturing Index (Tuesday) and the Employment Report (Friday). Seasonal adjustment can be a bit tricky in March. Economic activity, including job growth, typically ramps up in the spring (we can expect to add between 800,000 and 900,000 jobs in March before seasonal adjustment).

While the job market has shown signs of steady improvement over the last few years, we’re still a long way from a full recovery. Fed Chair Yellen’s speech on Monday is not expected to be market-moving (but you never know). Keep an eye out for any developments on the Ukraine/Russia border.

Indices

  Last Last Week YTD return %
DJIA 16264.23 16331.05 -1.88%
NASDAQ 4151.23 4319.286 -0.61%
S&P 500 1849.04 1872.01 0.04%
MSCI EAFE 1892.86 1864.01 -1.19%
Russell 2000 1151.44 1198.97 -1.05%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.07 0.04
30-year mortgage 4.40 3.57

Currencies

  Last 1-year ago
Dollars per British Pound 1.662 1.512
Dollars per Euro 1.375 1.277
Japanese Yen per Dollar 102.160 94.430
Canadian Dollars per Dollar 1.106/td> 1.017
Mexican Peso per Dollar 13.092 12.339

Commodities

  Last 1-year ago
Crude Oil 101.28 96.58
Gold 1292.06 1606.17

Bond Rates

  Last 1-month ago
2-year treasury 0.45 0.33
10-year treasury 2.70 2.66
10-year municipal (TEY) 4.15 4.45

Treasury Yield Curve – 3/28/2014

Treasury Yield Curve – 3/28/2014

S&P Sector Performance (YTD) – 3/28/2014

S&P Sector Performance (YTD) – 3/28/2014

Economic Calendar

March 31

 —

Yellen Speaks (“Strengthening Communities”)
Chicago Purchasing Managers Index (March)
April 1

 —

SM Manufacturing Index (March)
Motor Vehicle Sales (March)
April 2

 —

ADP Payroll Estimate
April 3

 —

Jobless Claims (week ending March 29)
ISM Non-Manufacturing Index (March)
April 4

 —

Employment Report (March)
April 14

 —

Retail Sales (March)
April 18

 —

Good Friday (markets closed)
April 30

 —

Real GDP (1Q14, advance estimate)
FOMC Policy Decision (no press conference)

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 March 27th, 2013.

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


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