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Market Commentary by Scott J. Brown, Ph.D., Chief Economist
The economic data were mixed. However, the key release, the retail sales report, disappointed. Retail sales fell more than expected in March, while figures for January and February were revised lower. Recall that the February personal income and spending numbers, released on Good Friday, pointed to a much better growth rate in consumer spending than had been anticipated earlier.
The retail sales report, in turn, should dampen the 1Q13 GDP outlook to some extent and reduce GDP projections for 2Q13. Consumer sentiment fell in the mid-month assessment. Jobless claims fell back, after having risen in the two previous weeks, suggesting that the recent moves merely reflecting some noise in the data.FOMC minutes from the March 19-20 policy meeting added little new information to the current debate about when to begin trimming the pace of asset purchases. The majority of Fed officials expect to start reducing asset purchases sometime in the second half of the year, stopping at year-end. However, Fed future moves will depend on labor market conditions.
The stock market rose to new highs (S&P500), but succumbed to the weaker-than-expected retail sales data (still, losses seemed to be generally contained). Bond yields fell.
Next week, the important economic data bunch up on Tuesday. The CPI should reflect lower gasoline prices (the decline will be amplified by the seasonal adjustment), with mild core inflation. Residential construction figures may be subject to weather effects. Industrial production should be boosted by cooler temperatures (increased output of utilities), while manufacturing output is likely to appear relatively lackluster. The Fed’s Beige Book will provide anecdotal color on the current economic situation.
Consumer Money Rates
Treasury Yield Curve – 04/12/2013
S&P Sector Performance (YTD) – 04/12/2013
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, 2013.
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
TopicsBritish Pound, Crude Oil, Cyprus, DJIA, Euro, gold, Iceland, Japanese Yen, Mexican Peso, MSCI EAFE, Nasdaq, Raymond James Investment Services, Russell 2000, S&P 500, Scott J. Brown, U.S. Stock Market, Weekly Market Snapshot
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