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The Weekly Market Snapshot from Frazier Allen

Market Commentary by Scott J. Brown, Ph.D., Chief Economist

Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services
Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services

The Federal Open Market Committee (FOMC) left the target range for federal funds unchanged (at from 0% to 0.25%) and repeated that economic conditions are likely to warrant exceptionally low rates “for an extended period.” The FOMC noted that “the economic recovery is proceeding and that the labor market is improving gradually,” but cautioned that “financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.” The FOMC also acknowledged that “underlying inflation has trended lower.”.

The People’s Bank of China said that it would allow greater flexibility in its currency, but cautioned that reform would be “gradual.” Home sales figures were weaker than expected in May, even taking into account the impact of the expiration of the homebuyer tax credit on April 30. Durable goods orders were mixed. The estimate of first quarter 2010 gross domestic product (GDP) growth was revised lower (to 2.7%, compared to +3.2% in the advance estimate and +3.0% in the 2nd estimate).

Next week, there will be a number of potentially market-moving data releases, but the focus will be on the June Employment Report. The Census Bureau reported that there were 237,042 fewer temporary census workers in mid-June than there were in mid-May. Hence, the headline payroll figure is likely to be pushed well into negative territory. This should not be a surprise for the financial markets. The key will be private-sector payrolls, which averaged a 139,000 monthly gain over the three months ending in May – but may post a more moderate increase in June.


  Last Last Week YTD return %
DJIA 10152.8 10434.17 -2.64%
NASDAQ 2217.42 2307.16 -2.28%
S&P 500 1073.69 1116.04 -3.71%
MSCI EAFE 1395.48 1414.82 -11.72%
Russell 2000 633.17 665.85 1.24%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.25 0.25
30-year mortgage 4.72 5.56


  Last 1-year ago
Dollars per British Pound 1.495 1.645
Dollars per Euro 1.236 1.399
Japanese Yen per Dollar 89.260 95.580
Canadian Dollars per Dollar 1.043 1.149
Mexican Peso per Dollar 12.673 13.302


  Last 1-year ago
Crude Oil 76.16 68.14
Gold 1246.65 932.05

Bond Rates

  Last 1-month ago
2-year treasury 0.65 0.83
10-year treasury 3.11 3.33
10-year municipal (TEY) 4.89 4.69

Treasury Yield Curve – 6/25/2010

S&P Sector Performance Charts – 6/25/2010

Economic Calendar

June 28 Personal Income and Spending (May)
June 29 S&P/Case-Shiller Home Prices (April)
Consumer Confidence (June)
June 30 ADP Payroll Estimate (June)
Chicago Purchasing Managers Index (June)
July 1 Jobless Claims (week ending June 26)
Construction Spending (May)
ISM Manufacturing Index (June)
July 2 Employment Report (June)
July 5 Independence Day Holiday (markets closed)
August 10 FOMC Meeting

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 10th, 2010.

©2010 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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