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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 Federal Open Market Committee left short-term interest rates unchanged and retained its conditional commitment to keep rates low for “an extended period.” The FOMC also repeated that its $600 billion asset purchase program will be completed by the end of this month. The FOMC noted that the economic recovery is continuing, but “somewhat more slowly” than had been expected. The slower pace of the recovery “reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan.

In his post-FOMC press briefing, Fed Chairman Bernanke said that while Fed policymakers expects growth to pick up into 2012, “we don’t have a precise read on why this slower pace of growth is persisting.” The FOMC lower its expectations of GDP growth for this year (2.7%-2.9%) and next (3.3%-3.7%). The FOMC expects that the unemployment rate will to continue to decline, “but the pace of progress remains frustratingly slow.

The economic data reports were consistent with the view of slower economic growth in the near term, but not a contraction. The announcement by the U.S. and others to tap into petroleum reserves helped push oil prices down further (which, if sustained, should help consumer spending growth in the second half of the year).

With an increased level of uncertainty in the economic outlook, investors will be eager for timely data – and there will be some important economic releases in the next two weeks. Personal income and spending figures will help fill in the GDP picture for the second quarter. Consumer confidence figures should provide some insight into the state of the household sector. The ISM manufacturing data will be a key component of the near-term outlook for the factory sector. A week from Friday, the June Employment Report arrives.

Indices

  Last Last Week YTD return %
DJIA 12050.00 11961.52 4.08%
NASDAQ 2686.75 2623.70 1.28%
S&P 500 1283.50 1267.64 2.06%
MSCI EAFE 1628.03 1631.59 -1.83%
Russell 2000 802.68 781.54 2.43%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.10 0.19
30-year mortgage 4.44 4.73

Currencies

  Last 1-year ago
Dollars per British Pound 1.598 1.490
Dollars per Euro 1.419 1.226
Japanese Yen per Dollar 80.510 90.110
Canadian Dollars per Dollar 0.981 1.042
Mexican Peso per Dollar 11.872 12.680

Commodities

  Last 1-year ago
Crude Oil 90.65 75.85
Gold 1519.43 1233.05

Bond Rates

  Last 1-month ago
2-year treasury 0.35 0.37
10-year treasury 2.92 2.94
10-year municipal (TEY) 4.01 4.07

Treasury Yield Curve – 6/24/2011 

Treasury Yield Curve – 6/24/2011

S&P Sector Performance (YTD) – 6/24/2011

S&P Sector Performance (YTD) – 6/24/2011 

Economic Calendar

June 27th  —  Personal Income and Spending (May)
June 28th  —  S&P/Case-Shiller Home Prices (April)
Consumer Confidence (June)
June 29th  —  Pending Home Sales Index (May)
June 30th  —  Jobless Claims (week ending June 25th)
Chicago Purchasing Managers Index (June)
July 1st  —  Consumer Sentiment (June)
ISM Manufacturing Index (June)
Motor Vehicle Sales (June)
July 4th  —  Independence Day (markets closed)
July 8th  —  Employment Report (June)
July 13th  —  Bernanke Monetary Policy Testimony
July 29th  —  Real GDP (2Q11 advance estimate)
August 9th  —  FOMC Meeting (no press conference)

Treasury Yield Curve – 6/17/2011

Treasury Yield Curve – 6/17/2011

S&P Sector Performance (YTD) – 6/17/2011

S&P Sector Performance (YTD) – 6/17/2011

Economic Calendar

June 21st Existing Home Sales (May)
FOMC Meeting Begins
June 22nd FOMC Policy Decision
Bernanke Press Conference
June 23rd New Home Sales (May)
June 24th Real GDP (1Q11, 3rd estimate)
Durable Goods Orders (May)
July 4th Independence Day (markets closed)
July 8th Employment Report (June)
July 29th Real GDP (2Q11 advance estimate)

Treasury Yield Curve – 6/10/2011

Treasury Yield Curve – 6/10/2011

S&P Sector Performance (YTD) – 6/10/2011

S&P Sector Performance (YTD) – 6/10/2011

Economic Calendar

June 14th Producer Price Index (May)
Retail Sales (May)
June 15th Consumer Price Index (May)
Empire State Manufacturing Index (June)
Industrial Production (May)
Homebuilder Sentiment (June)
June 16th Jobless Claims (week ending June 11th)
Current Account (1Q11)
Building Permits, Housing Starts (May)
Philadelphia Fed Survey (June)
June 17th FConsumer Sentiment (mid-June)
Leading Economic Indicators (May)
June 21st Existing Home Sales (May)
FOMC Meeting Begins
June 22nd FOMC Policy Decision
Bernanke Press Conference
June 23rd New Home Sales (May)
June 24th Real GDP (1Q11, 3rd estimate)
Durable Goods Orders (May)
July 4th Independence Day (markets closed)
July 8th Employment Report (June)

Treasury Yield Curve – 5/27/2011

Treasury Yield Curve – 5/27/2011

S&P Sector Performance (YTD) – 5/27/2011

S&P Sector Performance (YTD) – 5/27/2011

Economic Calendar

May 30th Memorial Day Holiday (markets closed)
May 31st S&P/Case-Shiller Home Price Index (April)
Chicago PM Index (May)
Consumer Confidence (May)
June 1st Challenger Layoffs (May)
ADP Payroll Estimate (May)
Construction Spending (April)
ISM Manufacturing Index (May)
Motor Vehicle Sales (May)
June 2nd Jobless Claims (week ending May 28th)
Productivity (1Q11, revised)
June 3rd Employment Report (May)
ISM Non-Manufacturing Index (May)
June 8th Fed Beige Book
June 9th Trade Balance (April)
June 14th Retail Sales (May)
June 15th Consumer Price Index (May)
June 21st-22nd FOMC Meeting
Bernanke Press Conference

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 23rd, 2011.

©2011 Raymond James Financial Services, Inc. member FINRA / SIPC.


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