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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 were mixed. Retail sales and industrial production figures for January disappointed, but softness was seen as likely to have been the result of poor weather. The Fed’s two main regional manufacturing surveys were strong in February, with a further intensification of input price pressures and evidence that firms are a bit more able to pass along higher costs. January inflation figures were mostly higher than expected. The core CPI rose 0.2%, reflecting some one-time increases (such as apparel). Minutes of the January 25-26 Fed policy meeting showed that officials were somewhat more optimistic about 2011 GDP growth, but did not expect much improvement in the unemployment rate over the course of the year.

The stock market seemed to struggle a bit with the economic data, although reactions were limited. The major market averages still managed to forge ahead during the week.

Next week, the economic data will be subject to more than the usual uncertainties. Home sales are normally low in January – seasonal adjustment may magnify any adverse effects from poor weather. The Conference Board changed the company that does the actual sampling for the Consumer Confidence Index, so new figures may not be exactly comparable to the old (although they’re supposed to be). Durable goods orders are notoriously choppy – expect a rebound in aircraft orders and some weather effects in January. The government’s estimate of fourth quarter GDP growth is likely to be revised higher. Looking ahead, the February Employment Report looms large, but there will likely be some lingering weather effects in the jobs data.

Indices

  Last Last Week YTD return %
DJIA 12318.14 12229.3 6.40%
NASDAQ 2831.58 2790.45 6.74%
S&P 500 1340.43 1321.87 6.58%
MSCI EAFE 1753.83 1725.59 5.76%
Russell 2000 834.02 812.7 6.43%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.16 0.13
30-year mortgage 4.93 5.13

Currencies

  Last 1-year ago
Dollars per British Pound 1.616 1.570
Dollars per Euro 1.359 1.362
Japanese Yen per Dollar 83.290 90.800
Canadian Dollars per Dollar 0.985 1.046
Mexican Peso per Dollar 12.038 12.877

Commodities

  Last 1-year ago
Crude Oil 86.36 77.33
Gold 1383.43 1119.25

Bond Rates

  Last 1-month ago
2-year treasury 0.79 0.62
10-year treasury 3.62 3.45
10-year municipal (TEY) 5.57 5.54

Treasury Yield Curve – 2/18/2011 

Treasury Yield Curve – 2/18/2011

S&P Sector Performance (YTD) – 2/18/2011

 S&P Sector Performance (YTD) – 2/18/2011

Economic Calendar

February 21st  —  Presidents’ Day (markets closed)
February 22nd  —  S&P/Case-Shiller Home Prices (December)
Consumer Confidence (February)
February 23rd  —  Existing Home Sales (January)
February 24th  —  Jobless Claims (week ending February 19th)
Durable Goods Orders (January)
New Home Sales (January)
February 25th  —  Real GDP (Q410, 2nd estimate)
Consumer Sentiment (February)
February 28th  —  Personal Income and Spending (January)
March 1st  —  ISM Manufacturing Index
March 2nd  —  Bernanke Monetary Policy Testimony (tentative)
March 3rd  —  ISM Non-Manufacturing Index (February)
March 4th  —  Employment Report (February)
March 15th  —  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 February 10th, 2011.

©2011 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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