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Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 28th, 2015

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The economic calendar was light. Residential construction figures were mixed, largely reflecting the usual noise in the multi-family sector data (single-family starts and permits were little changed and still up strongly from a year ago). Existing home sales rebounded from a surprise drop in August. The four-week average for jobless claims fell to the lowest level since 1973.

Earnings reports were mixed, but investors appeared to be encouraged by the view that economic growth will continue, but not so fast that the Federal Reserve rushes to take away the punch bowl.

Frazier Allen
Frazier Allen

The European Central Bank left monetary policy unchanged, but ECB President Mario Draghi signaled a possible expansion of the asset purchase program at the meeting in early December. That news sent the euro sharply lower against the greenback. The People’s Bank of China reduced short-term interest rates for the sixth time since last November and lowered the reserve requirement ratio.

A majority of the Freedom Caucus members in the U.S. House agreed to line up behind Paul Ryan as speaker. Congress needs to raise the debt ceiling by November 3rd. Treasury delayed the upcoming auction of 2-year notes due to concerns about the debt ceiling.

Next week, nothing much is expected from the Fed policy meeting. There is no press conference with Chair Janet Yellen; no revision of Fed projections. Instead, investors will look to minor changes in the wording of the policy statement to gauge the likelihood of a move at the mid-December meeting.

The advance estimate of 3Q15 GDP growth is expected to be mixed – domestic strength offset by large drags from net exports and slower inventory growth. The Employment Cost Index will be seen as a possible driver of Fed policy action.

Indices

Last Last Week YTD return %
DJIA 17489.16 17141.75 -1.87%
NASDAQ 4920.05 4870.10 3.89%
S&P 500 2052.51 2023.86 -0.31%
MSCI EAFE 1759.62 1753.89 -0.86%
Russell 2000 1154.52 1162.77 -4.16%

Consumer Money Rates

Last 1 year ago
Prime Rate 3.25 3.25
Fed Funds 0.12 0.08
30-year mortgage 3.82 3.92

Currencies

Last 1 year ago
Dollars per British Pound 1.539 1.605
Dollars per Euro 1.111 1.265
Japanese Yen per Dollar 120.690 107.140
Canadian Dollars per Dollar 1.309 1.124
Mexican Peso per Dollar 16.477 13.559

Commodities

Last 1 year ago
Crude Oil 44.83 81.42
Gold 1166.05 1241.27

Bond Rates

Last 1 month ago
2-year treasury 0.63 0.69
10-year treasury 2.08 2.16
10-year municipal (TEY) 3.19 3.46

Treasury Yield Curve – 10/23/2015

As of close of business 10/22/2015

Treasury Yield Curve – 10/23/2015

Economic Calendar

Oct 26th — New Home Sales (September)
Oct 27th — Durable Goods Orders (September)
Consumer Confidence (October)
Oct 28th — Trade Balance in Goods (September)
FOMC Policy Decision (no Yellen press conference)
Oct 29th — Jobless Claims (week ending October 24)
Real GDP (3Q15, advance estimate)
Pending Home Sales Index (September)
Oct 30th — Personal Income and Spending (September)
Employment Cost Index (3Q15)
Chicago Purchasing Managers’ Index (October)
Nov 2nd — ISM Manufacturing Index (October)

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 October 22nd, 2015.

©2015 Raymond James Financial Services, Inc. member FINRA / SIPC.

Frazier Allen
Frazier Allenhttp://www.raymondjames.com/frazierallen
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank 50 Franklin Street | Clarksville, TN 37040 | 931-553-2048
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