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Weekly Market Snapshot from Frazier Allen for the week of March 17th, 2013

Weekly Market Snapshot

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

Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services

The economic data were mixed, but the stock market continued to focus on the good news and ignored the rest. Retail sales rose more than expected in February, but results varied across sectors. Industrial production picked up, following a weak January (results varied by industry).

The inflation reports showed some pressure from higher gasoline, as anticipated, and moderate core inflation. Treasury reported a smaller deficit than a year ago. Initial claims for unemployment benefits continued to trend lower. Consumer sentiment fell in the mid-March assessment, with a sharp decline in expectations (down to a 15-month low).

The Dow Jones Industrials Average continued to new record highs, up 10 sessions in a row. In contrast to the optimism expressed in equities, bond yields have remained relatively low.

Next week, housing figures have some market-moving potential, but February is not a “make or break” month for the sector (weather can have an impact). The March figures will be more important. No surprises are expected from the Fed policy meeting on Wednesday.

Officials have had a public debate about the potential costs and benefits of current policy and the settled view is that the benefits (to the labor market, in particular) outweigh the potential that we may see excessive risk-taking and financial instability. The Fed will release revised projections of growth, unemployment, and inflation. Note that the Fed policy announcements will now be made at 2:00pm. On the last meeting of the quarter, the Fed will also release revised projects at 2:00 p.m. and Bernanke’s press briefings will follow at 2:30pm.

Indices

  Last Last Week YTD return %
DJIA 14539.14 14329.49 10.95%
NASDAQ 3258.93 3232.09 7.93%
S&P 500 1563.23 1544.26 9.61%
MSCI EAFE 1699.43 1682.67 5.95%
Russell 2000 953.07 934.57 12.21%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.17 0.15
30-year mortgage 3.51 3.92

Currencies

  Last 1-year ago
Dollars per British Pound 1.509 1.567
Dollars per Euro 1.301 1.302
Japanese Yen per Dollar 95.880 83.630
Canadian Dollars per Dollar 1.023/td> 0.993
Mexican Peso per Dollar 12.465 12.700

Commodities

  Last 1-year ago
Crude Oil 93.03 105.43
Gold 1592.90 1636.25

Bond Rates

  Last 1-month ago
2-year treasury 0.26 0.27
10-year treasury 2.00 2.03
10-year municipal (TEY) 3.31 3.07

Treasury Yield Curve – 03/15/2013

Treasury Yield Curve – 03/15/2013

S&P Sector Performance (YTD) – 03/15/2013

S&P Sector Performance (YTD) – 03/15/2013

Economic Calendar

March 18th

 —

Homebuilder Sentiment (March)
March 19th

 —

Building Permits, Housing Starts (February)
March 20th

 —

FOMC Policy Decision, Bernanke Press Briefing
March 21st

 —

Jobless Claims (week ending March 16th)
Philadelphia Fed Index (March)
Existing Home Sales (February)
Leading Economic Indicators (February)
March 26th

 —

Durable Goods Orders (February)
New Home Sales (February)
Consumer Confidence (March)
March 29th

 —

Good Friday Holiday (markets closed)
Personal Income and Spending (February)
April 5th

 —

Employment Report (March)
April 10th

 —

FOMC Minutes (March 20th)

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 February 28th, 2013.

©2013 Raymond James Financial Services, Inc. member FINRA / SIPC.

Frazier Allen
Frazier Allenhttp://www.raymondjames.com/frazierallen
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank 50 Franklin Street | Clarksville, TN 37040 | 931-553-2048
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