The Weekly Market Snapshot from Frazier Allen for the week of July 24th

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

The economic data were mixed. Housing starts rose sharply in June, but single-family permits were little changed. Home builder sentiment improved in July, but was still very low. Existing home sales for June disappointed.

The stock market reacted to varying perceptions about a deal to raise the debt ceiling. The Gang of Six plan appeared to have the most momentum. President Obama has agreed in principle to sign the resulting bill. It’s likely to clear the Senate, but could have some difficulty getting through the House. The plan would reduce the deficit by $3.7 trillion over 10 years, with $1 trillion in added revenue coming from tax reform. However, it’s unlikely that details of the plan will be worked out before the August 2nd deadline on the debt ceiling. So, an extension of the debt ceiling is expected to be needed.

Next week, the focus will be on the advance estimate of Q211 GDP growth. The advance estimate is always an adventure. The government will make assumptions about a number of missing components, including June inventories and foreign trade. This release will also include annual benchmark revisions, which adds another layer of uncertainty. The markets are likely to zero in on the overall growth figure, but as usual, investors should look beyond the headline GDP number to get at the underlying story (specifically, what’s happening to the key components: consumer spending and business fixed investment). Developments on the debt ceiling will be important and investors should continue to keep an eye on what’s happening in Europe.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 7/22/2011

 

S&P Sector Performance (YTD) – 7/22/2011

Economic Calendar

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 July 21st, 2011.

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