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Market Commentary by Scott J. Brown, Ph.D., Chief Economist
The economic data were mixed. Homebuilder sentiment continued to improve. Existing home sales rose 7.9% in August (+24.5% y/y). Housing starts and building permits were mixed in August, but continued to reflect an improving trend in single-family construction (permits up 19.3% y/y). The Fed’s two key regional manufacturing surveys were mixed, but remained weak.
Intraday volatility increased in the stock market as investors tried to weigh the Fed’s recent actions (and promise to do more if need) against the near-term headwinds and downside risks.
Next week, the financial markets could react to any surprises in the reports on consumer confidence and durable goods orders. Little change is expected in the third estimate of 2Q12 GDP growth (“ancient history” at this point). However, Friday’s personal income and spending figures, while not a major market-mover, will help fill in the picture for 3Q12 GDP growth.
Given the Fed’s emphasis on the job market, financial market participants are likely to look ahead to the September Employment Report (due October 5th).
Consumer Money Rates
Treasury Yield Curve – 9/21/2012
S&P Sector Performance (YTD) – 9/21/2012
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 September 20th, 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 Capacity Utilization, Weekly Market Snapshot
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