Clarksville, TN – The economic data were mixed. The ISM surveys both surprised to the upside, suggesting that the August slowdown was temporary. Unit auto sales were down from a year ago, but up relative to August on a seasonally adjusted basis.
Nonfarm payrolls rose a bit less than expected, while the unemployment rate ticked modestly higher – the start of the school year makes the September figures suspect, but the underlying trends suggest further improvement in overall labor market conditions.
Average hourly earnings rose 0.2%, up 2.6% year-over-year, with mixed results across industries.Still, the employment report did not much alter the overall consensus view of the economy (moderate growth).The IMF left its global growth estimates unchanged in its revised World Economic Outlook, but expectations for U.S. growth were lowered for 2016 and 2017. U.K. Prime Minister Theresa May said Article 50 would be submitted by the end of March, kicking off a two-year negation process for exiting the European Union. Fears of a hard Brexit sent the pound reeling (to a 31-year low vs. the U.S. dollar).
Next week, the bond market is off on Monday for the Columbus Day holiday (the stock market will be open). Market participants will be interested in the FOMC minutes, although we may not learn much (we know that officials were divided on whether to raise rates). Retail sales are likely to have improved last month, following softness in July and August (watch for possible revisions).
Indices
Last | Last Week | YTD return % | |
DJIA | 18268.50 | 18143.45 | 4.84% |
NASDAQ | 5306.85 | 5269.16 | 5.98% |
S&P 500 | 2160.77 | 2151.13 | 5.72% |
MSCI EAFE | 1694.91 | 1706.64 | -1.25% |
Russell 2000 | 1246.24 | 1237.75 | 9.71% |
Consumer Money Rates
Last | 1 year ago | |
Prime Rate | 3.50 | 3.25 |
Fed Funds | 0.29 | 0.13 |
30-year mortgage | 3.52 | 3.76 |
Currencies
Last | 1 year ago | |
Dollars per British Pound | 1.262 | 1.532 |
Dollars per Euro | 1.115 | 1.124 |
Japanese Yen per Dollar | 103.95 | 120.01 |
Canadian Dollars per Dollar | 1.322 | 1.306 |
Mexican Peso per Dollar | 19.236 | 16.653 |
Commodities
Last | 1 year ago | |
Crude Oil | 50.44 | 47.81 |
Gold | 1253.00 | 1148.70 |
Bond Rates
Last | 1 month ago | |
2-year treasury | 0.85 | 0.78 |
10-year treasury | 1.76 | 1.65 |
10-year municipal (TEY) | 2.49 | 2.26 |
Treasury Yield Curve – 10/07/2016
As of close of business 10/06/2016
S&P Sector Performance (YTD) – 10/07/2016
As of close of business 10/06/2016
Economic Calendar
October 9 | — | Second Presidential Debate |
October 10 | — | Columbus Day (bond market closed) |
October 12 | — | FOMC minutes (September 20-21) |
October 13 | — | Jobless Claims (week ending October 8) Import Prices (September) |
October 14 | — | Producer Price Index (September) Retail Sales (September) |
October 17 | — | Industrial Production (September) |
October 19 | — | Third Presidential Debate |
October 28 | — | Real GDP (3Q16, advance estimate) |
November 2 | — | FOMC Policy Decision (no press conference) |
November 4 | — | Employment Report (September) |
November 8 | — | Election Day |
December 14 | — | FOMC Policy Decision (Yellen press conference) |
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 September 29th, 2016.