Clarksville Weekly Market Snapshot from Frazier Allen for the week of June 29th, 2015

Clarksville, TN – The week began with a renewed sense of optimism that a Greek debt deal would be worked out. Sentiment then faded after negotiations with Greece’s creditors broke down, but then hopes continued that a deal would be reached over the weekend.

The economic data were mixed. Home sales figures improved in May. Durable goods orders were disappointing. The estimate of 1Q15 GDP was revised to show a -0.2% annual rate (vs. -0.7% in the second estimate), up 3.0% from a year ago. Note that the estimate of Gross Domestic Income rose at a 1.9% annual rate (+3.7% y/y).

The May personal income and spending suggested that inflation-adjusted consumer spending (70% of GDP) was on track for about a 3.0% annual rate in 2Q15. The University of Michigan’s Consumer Sentiment Index rose more than expected in the full-month reading for June, with a sharp rise in expectations (thought to be a driver of big ticket spending).

Next week, fresh June data will arrive. With Fed policy decisions being data-dependent, financial market participants are likely to react sharply to any surprises. The ADP figures, the Consumer Confidence Index and the ISM manufacturing data have plenty of market-moving potential, but most of the weight will be on the Employment Report (released a day sooner than usual due to Friday’s holiday).

Payroll figures for June will be subject to seasonal adjustment issues (in June 2014, prior to seasonal adjustment, we lost over 800,000 jobs in education, but gained about 1.4 million non-education jobs). One should really concentrate on the three-month average gain in payrolls, but the markets will likely focus solely on the June figure (which will be subject to revision). Note that neither the stock market nor the bond market will close early on Thursday, although market activity is expected to thin out by the afternoon.

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 June 25th, 2015.

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