Clarksville, TN – Minutes of the September 20-21 policy meeting showed that Federal Open Market Committee members were divided on whether to raise short-term interest rates, and most of those voting to wait felt that it was “a close call.”
Financial markets have increasingly priced in a mid-December rate hike. Amid a thin economic calendar, investors focused on what’s happening in the rest of the world, but also reacted to the initial earnings reports for 3Q16.
Retail sales results for September were a bit better than anticipated, led by a rebound in motor vehicle sales.Higher gasoline prices also contributed. Core sales (which exclude autos, building materials and gasoline) rose modestly, consistent with a moderate pace of consumer spending growth in the third quarter.
Next week, the economic calendar picks up. The Consumer Price Index (Tuesday) should be lifted by higher gasoline prices (boosted partly by the seasonal adjustment, as gasoline prices normally fall in September).
The third presidential debate is scheduled for Wednesday night, and investors may continue to focus more on down ballot contests (House and Senate).
Indices
Last | Last Week | YTD return % | |
DJIA | 18098.94 | 18268.50 | 3.87% |
NASDAQ | 5213.33 | 5306.85 | 4.11% |
S&P 500 | 2132.55 | 2160.77 | 4.34% |
MSCI EAFE | 1654.37 | 1694.91 | -3.61% |
Russell 2000 | 1215.75 | 1246.24 | 7.03% |
Consumer Money Rates
Last | 1 year ago | |
Prime Rate | 3.50 | 3.25 |
Fed Funds | 0.40 | 0.13 |
30-year mortgage | 3.56 | 3.82 |
Currencies
Last | 1 year ago | |
Dollars per British Pound | 1.225 | 1.548 |
Dollars per Euro | 1.106 | 1.147 |
Japanese Yen per Dollar | 103.71 | 118.83 |
Canadian Dollars per Dollar | 1.319 | 1.294 |
Mexican Peso per Dollar | 18.925 | 16.474 |
Commodities
Last | 1 year ago | |
Crude Oil | 50.44 | 46.64 |
Gold | 1257.60 | 1179.80 |
Bond Rates
Last | 1 month ago | |
2-year treasury | 0.85 | 0.74 |
10-year treasury | 1.78 | 1.69 |
10-year municipal (TEY) | 2.62 | 2.40 |
Economic Calendar
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 |
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 October 13th, 2016.