Clarksville, TN – The partial government shutdown and brinksmanship over the debt ceiling continued. However, financial market participants were encouraged by signs that the two sides were at least willing to talk to each other.
House Republicans appear to have abandoned demands for a repeal or delay of the Affordable Care Act, but it hasn’t been clear what they want instead. Note that a temporary (six-week or three-month) extension of the debt ceiling does not remove uncertainty completely, but it would sidestep a near-term financial catastrophe.As expected, President Obama nominated current Fed Vice Chair Janet Yellen to be chairwoman of the Federal Reserve (term to begin February 1st). While focused on improving labor market conditions, Yellen also pledged to keep inflation in check and safeguard the financial system. Yellen should have little trouble being approved by the Senate.
Minutes of the September 17-18 Federal Open Market Committee indicated that “for several members, the various considerations made the decision to maintain an unchanged pace of asset purchases at this meeting a relatively close call.” Some officials argued for an immediate taper, citing cumulative improvement in the labor market since the asset purchase program began. Others argued for a delay, citing “disappointing” economic data and uncertainties regarding negotiations on the budget and debt ceiling, as well as a possible further increase in long-term interest rates if the Fed decided to taper.
Next week, most of the government economic data reports are expected to be delayed due to the shutdown. Investors will watch for signs of progress on the budget and debt ceiling.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Dollars per British Pound||1.596||1.600|
|Dollars per Euro||1.352||1.289|
|Japanese Yen per Dollar||98.110||78.260|
|Canadian Dollars per Dollar||1.038||0.980|
|Mexican Peso per Dollar||13.084||12.949|
|10-year municipal (TEY)||4.37||5.03|
Treasury Yield Curve – 10/11/2013
S&P Sector Performance (YTD) – 10/11/2013
|Columbus Day (bond market closed)|
|Empire State Manufacturing Index (October)
Fed Beige Book
|Consumer Price Index (September)
Homebuilder Sentiment (October)
Fed Beige Book
|Jobless Claims (week ending October 5th)
Building Permits, Housing Starts (September)
Industrial Production (September)
Philadelphia Fed Index (October)
|Leading Economic Indicators (September)|
|Debt Ceiling becomes binding|
|Real GDP (3Q13, advance)
FOMC Policy Decision, no press briefing
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 October 10th, 2013.