« Older: Austin Peay Lady Govs Volleyball loses to Western Kentucky Newer: Sean Halton and Taylor Green Power Nashville Sounds to 7-3 win over Iowa Cubs »
Market Commentary by Scott J. Brown, Ph.D., Chief Economist
The FOMC Minutes from the July 31st/August 1st policy meeting showed that Fed officials were worried about the deceleration in economic growth. “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.” However, “several members noted the benefits of accumulating further information that could help clarify the contours of the outlook for economic activity and inflation as well as the need for further policy action.”
Meeting participants discussed three policy options: extending the forward guidance (the length of time which the Fed expects to keep short-term rate exceptionally low), undertaking another round of asset purchases, and lowering the interest rate the Fed pays on excess bank reserves. Extending the forward guidance appeared to have the least amount of internal resistance, but additional asset purchases had some support.The economic data were mixed. Home sales rebounded in July. Durable goods orders jumped 4.2%, led by a surge in orders at Boeing. Ex-transportation, orders fell 0.4%, and June was revised to -2.2% (from -1.4%). Ex-transportation, unfilled orders declined and inventories picked up – not a good sign.
Next week, there are plenty of potentially market-moving data releases, but market reaction should be relatively limited ahead of Bernanke’s Jackson Hole speech. Investors will be looking for clearer signals of QE3, but may be disappointed. Governor Romney will deliver his acceptance speech on Thursday evening and presidential candidates normally get a brief pop in the polls after the convention.
Consumer Money Rates
Treasury Yield Curve – 8/24/2012
S&P Sector Performance (YTD) – 8/24/2012
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 August 23rd, 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
© 2006-2020 Clarksville, TN Online is owned and operated by residents of Clarksville Tennessee.