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Market Commentary by Scott J. Brown, Ph.D., Chief Economist
The stock market began the week with a (negative) reaction to the March Employment Report (which was softer than expected, but not terrible). Worries about Europe and global growth also weighed against market sentiment – the fear subsided a bit on Wednesday and Thursday, but appeared to return on Friday. Fed officials suggest that monetary policy was conditional on how the economy develops – although no action is expected anytime soon.
The economic data remained consistent with moderate growth and moderate inflation. As expected, the seasonal adjustment dampened the impact of higher gasoline prices in the Consumer Price Index. The core CPI rose 2.3% y/y. The Fed’s Beige Book noted “modest to moderate” economic growth.
Next week, the retail sales report will likely set the tone for the week, although we could see market reactions to any surprises in the other data reports. Fed officials will go quiet (there’s an unofficial blackout period, a week before and after policy meetings, where officials won’t comment on the economy or monetary policy).
Earnings and Europe are expected to remain important factors for the financial markets.
Consumer Money Rates
Treasury Yield Curve – 4/13/2012
S&P Sector Performance (YTD) – 4/13/2012
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.
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 April 4th, 2012.
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
TopicsCapacity Utilization, Consumer Price Index, Economic Data, European Debt, Federal Open Market Committee, Financial Markets, Frazier Allen, Global Equity Markets, Gross Domestic Product, Index of Leading Economic Indicators, Manufacturing Output, Raymond James, Raymond James Investment Services, Scott J. Brown, Seasonal Adjustment, Short-Term Interest Rates, Volatility, Weekly Market Snapshot
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