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The Weekly Market Snapshot from Frazier Allen

 

Weekly Market Snapshot

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 economic data calendar was thin. Weekly claims for unemployment insurance benefits fell, but the numbers are normally choppy during this time of year (still, the underlying trend may be edging down due to better seasonal hiring this year). The September trade deficit was a bit narrower than assumed in the advance GDP report. Imports and exports fell sharply during the recession (narrowing the trade deficit considerably) and partly rebounded in the recovery (leading to a resumed widening of the deficit). However, recent figures suggest a flattening in these trends (and perhaps some stabilization in the size of the trade deficit, at least in the near term).

There was much interest ahead of the G-20 meeting (as with any such meeting), but these things always disappoint. The G-20 communiqué suggested no progress on reducing global imbalances or relieving monetary and fiscal policy tensions. The euro weakened on renewed sovereign debt worries (this time focusing mostly on Ireland, where austerity moves have done nothing to instill confidence).

Next week, the economic calendar picks up with a vengeance. The focus should be on the reports of retail sales, industrial production, and residential construction, which are all expected to be moderate. The inflation reports will reflect some boost from higher gasoline prices (amplified by the seasonal adjustment, which is expecting price declines), but core inflation should remain low. While the markets could react to any surprises in the data – and with so many reports, there’s a good chance of something unexpected – the figures aren’t likely to significantly alter the overall economic picture (that is, moderate growth, but not especially strong).

Indices

  Last Last Week YTD return %
DJIA 11283.1 11434.84 8.20%
NASDAQ 2555.52 2577.34 12.62%
S&P 500 1213.54 1221.06 8.83%
MSCI EAFE 1640.29 1675.07 3.77%
Russell 2000 731.58 733.46 16.98%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.25 0.25
30-year mortgage 4.38 5.07

Currencies

  Last 1-year ago
Dollars per British Pound 1.611 1.656
Dollars per Euro 1.365 1.497
Japanese Yen per Dollar 82.480 89.890
Canadian Dollars per Dollar 1.007 1.046
Mexican Peso per Dollar 12.274 13.148

Commodities

  Last 1-year ago
Crude Oil 87.81 79.28
Gold 1405.75 1113.90

Bond Rates

  Last 1-month ago
2-year treasury 0.46 0.36
10-year treasury 2.68 2.55
10-year municipal (TEY) 4.17 4.00

Treasury Yield Curve – 11/12/2010 

Treasury Curve

S&P Sector Performance (YTD) – 11/12/2010 

S&P Sector Performance

Economic Calendar

November 15th  —  Retail Sales (October)
Empire State Manufacturing Index (November)
Business Inventories (September)
November 16th  —  Producer Price Index (October)
Industrial Production (October)
Homebuilder Sentiment (November)
November 17th  —  Consumer Price Index (October)
Real Weekly Earnings (October)
Building Permits, Housing Starts (October)
November 18th  —  Jobless Claims (week ending November 13th)
Philadelphia Fed Index (November)
Leading Economic Indicators (October)
November 23rd  —  Real GDP (3Q10, 2nd estimate)
Existing Home Sales (October)
November 24th  —  Personal Income, Spending (October)
Durable Goods Orders (October)
Consumer Sentiment (November)
New Home Sales (October)
November 25th  —  Thanksgiving (market closed)
December 3rd  —  Employment Report (November)
December 14th  —  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 Noverber 11th, 2010.

©2010 Raymond James Financial Services, Inc. member FINRA / SIPC.


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