Clarksville, TN – Concerns about the economic recovery at home and abroad helped pushed long-term interest rates lower (with the 10-year Treasury yield below 2.5%). Stocks fell broadly.
The economic data were mixed. April retail sales and industrial production disappointed, but there were upward revisions to previous figures. Building permits and housing starts jumped sharply in April, but strength was concentrated in the volatile multi-family sector.
Single-family construction activity improved only modestly. The Consumer Price Index rose in line with expectations, reflecting higher prices of food and gasoline. A jump in airline fares added to the core CPI.
The Producer Price Index rose more than anticipated, but the gauges for the earlier stages of production suggested limited inflation pressure within the pipeline. Import prices fell. Consumer sentiment fell short of expectations in the mid-month reading for May.Next week, the economic calendar is relatively thin. We’re unlikely to get any new revelations from the FOMC minutes, but there’s always a chance that the financial markets will take something out of context and run with it.
Given Fed Chair Yellen’s concerns about the housing recovery, the home sales figures will likely receive a lot more scrutiny than usual (but bear in mind that the new home sales figures are erratic and unreliable). The bond market will close early on Friday ahead of the three-day weekend.
Indices
Last | Last Week | YTD return % | |
DJIA | 16446.81 | 16550.97 | -0.78% |
NASDAQ | 4069.29 | 4051.50 | -2.57% |
S&P 500 | 1870.85 | 1875.63 | 1.22% |
MSCI EAFE | 1937.72 | 1944.74 | 1.15% |
Russell 2000 | 1095.99 | 1097.43 | -5.81% |
Consumer Money Rates
Last | 1-year ago | |
Prime Rate | 3.25 | 3.25 |
Fed Funds | 0.07 | 0.12 |
30-year mortgage | 4.20 | 3.51 |
Currencies
Last | 1-year ago | |
Dollars per British Pound | 1.679 | 1.521 |
Dollars per Euro | 1.371 | 1.286 |
Japanese Yen per Dollar | 101.580 | 102.510 |
Canadian Dollars per Dollar | 1.088 | 1.018 |
Mexican Peso per Dollar | 12.928 | 12.258 |
Commodities
Last | 1-year ago | |
Crude Oil | 101.50 | 94.30 |
Gold | 1295.65 | 1395.78 |
Bond Rates
Last | 1-month ago | |
2-year treasury | 0.36 | 0.39 |
10-year treasury | 2.51 | 2.67 |
10-year municipal (TEY) | 3.72 | 4.32 |
Treasury Yield Curve – 5/16/2014
S&P Sector Performance (YTD) – 5/16/2014
Economic Calendar
May 21st | — | FOMC Minutes (April 29th-30th) |
May 22nd | — | Jobless Claims (week ending May 17th) Existing Home Sales (April) Leading Economic Indicators (April) |
May 23rd | — | New Home Sales (April) |
May 26th | — | Memorial Day Holiday (markets closed) |
May 27th | — | Durable Goods Orders (April) Case-Shiller Home Price Index (March) Consumer Confidence (May) |
May 29th | — | Real GDP (1Q14, 2nd estimate) Pending Home Sales Index (April) |
May 30th | — | Personal Income and Spending (April) Chicago PM Index (May) |
Important Disclosures
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 May 8th, 2014.
©2014 Raymond James Financial Services, Inc. member FINRA / SIPC.