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Clarksville Weekly Market Snapshot from Frazier Allen for the week of September 15th, 2013

F&M Investment Services - Raymond JamesClarksville, TN – With a thin economic calendar, Syria remained a key concern for the markets. However, prospects for a U.S. strike diminished, which helped bolster equity market sentiment. The bond market is looking ahead to the Fed policy meeting. In the bond market, expectations on tapering have solidified somewhat, with a moderate majority seeing a small initial reduction in the pace of asset purchases.

Retail sales for August disappointed (relative to expectations), but figures for June and July were revised a bit higher. Jobless claims were distorted due to upgrades in state computer systems, but the trend had been lower in August. Hiring intentions improved. Consumer sentiment softened.

Frazier Allen
Frazier Allen

Next week, the focus will be on the Fed. Policymakers are generally expected to begin reducing the pace of asset purchases (starting in October), most likely with a $10 billion reduction in Treasury purchases (from $45 billion per month, to $35 billion) and no change in purchases of mortgage-backed securities (currently $40 billion per month).

The Fed ought to signal a wait-and-see attitude on further reductions (more likely in December, rather than in late October) and could reduce the 6.5% unemployment rate threshold (as a way to emphasis the forward guidance on short-term interest rates). While a tapering is generally expected, it may not be entirely factored into the markets.

Beyond the Fed meeting, the markets are likely to pay more attention to what’s happening in Washington. The government will need another Continuing Resolution by October 1st. Treasury has indicated that the debt ceiling will have to be raised before the second half of October.

Indices

  Last Last Week YTD return %
DJIA 15300.64 14937.48 16.76%
NASDAQ 3715.97 3658.79 23.07%
S&P 500 1683.42 1655.08 18.04%
MSCI EAFE 1790.30 1733.05 11.61%
Russell 2000 1048.48 1028.69 23.44%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.09 0.16
30-year mortgage 4.57 3.55

Currencies

  Last 1-year ago
Dollars per British Pound 1.581 1.611
Dollars per Euro 1.331 1.289
Japanese Yen per Dollar 99.160 77.860
Canadian Dollars per Dollar 1.032 0.976
Mexican Peso per Dollar 13.071 13.016

Commodities

  Last 1-year ago
Crude Oil 108.60 97.01
Gold 1330.99 1731.18

Bond Rates

  Last 1-month ago
2-year treasury 0.44 0.35
10-year treasury 2.89 2.77
10-year municipal (TEY) 4.98 4.62

Treasury Yield Curve – 09/13/2013

Treasury Yield Curve – 09/13/2013

S&P Sector Performance (YTD) – 09/13/2013

S&P Sector Performance (YTD) – 09/13/2013

Economic Calendar

September 16th

 —

Empire State Manufacturing Index (September)
Industrial Production (August)
September 17th

 —

Consumer Price Index (August)
Homebuilder Sentiment (September)
September 18th

 —

Building Permits, Housing Starts (August)
FOMC Policy Decision, Bernanke Press Briefing
September 19th

 —

Jobless Claims (week ending September 14th)
Philadelphia Fed Index (September)
Leading Economic Indicators (August)
Existing Home Sales (August)
September 24th

 —

Consumer Confidence (September)
September 25th

 —

Durable Goods Orders (August)
October 1st

 —

Continue Resolution needed
October 4th

 —

Employment Report (September)
Mid-October

 —

Debt Ceiling becomes binding
October 30th

 —

FOMC Policy Decision, no press briefing

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 September 12th, 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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