Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 12th, 2013

Clarksville, TN  – The economic data surprised. Real GDP rose at a stronger-than-expected 2.8% annual rate in the advance estimate for 3Q13, but the figure was boosted by faster growth in inventories (which added 0.8 percentage point to GDP growth).

Consumer spending rose at a 1.5% annual rate, while business fixed investment rose 1.6% – nothing to write home about. The partial government shutdown had a mixed impact on the October employment figures.

Nonfarm payrolls rose by 204,000 (median forecast: +125,000), while August and September figures were revised a net +60,000.

The unemployment rate edged up to 7.3%, but the Bureau of Labor Statistics indicated that many of the furloughed federal workers (who should have been recorded as “unemployed, on temporary layoff”) were misclassified (as “employed but absent from work”). Labor force participation fell sharply, but should rebound in the data for November.

The surprising strength in nonfarm payrolls puts a Fed tapering back in play for December. The Fed’s decision will be data-dependent. There will be one more employment report (due December 6th) before the December 17th-18th Federal Open Market Committee meeting. Note that the PCE Price Index, the Fed’s chief inflation gauge, rose 0.1% in September (+0.9% y/y), up 0.1% (+0.059% before rounding, +1.2% y/y), trending well below the Fed’s 2% goal. Low inflation was one factor in the Fed’s September decision to delay the tapering.

Next week, the economic calendar thins out somewhat. September trade figures could lead to some minor revisions to the 3Q13 GDP growth estimate. Industrial production is likely to have remained on a lackluster trend in October, mixed across industries. Janet Yellen is not expected to face much opposition in her nomination hearing. However, investors will listen for any clues pertinent to the tapering of asset purchases

Indices

	Last	Last Week	YTD return %
DJIA	15593.98	15545.75	19.00%
NASDAQ	3857.33	3919.71	27.75%
S&P 500	1747.15	1756.54	22.50%
MSCI EAFE	1854.72	1878.39	15.63%
Russell 2000	1079.09	1100.15	27.05%

Consumer Money Rates

	Last	1-year ago
Prime Rate	3.25	3.25
Fed Funds	0.08	0.17
30-year mortgage	4.16	3.40

Currencies

	Last	1-year ago
Dollars per British Pound	1.608	1.598
Dollars per Euro	1.341	1.276
Japanese Yen per Dollar	98.510	79.910
Canadian Dollars per Dollar	1.045	0.997
Mexican Peso per Dollar	13.204	13.053

Commodities

	Last	1-year ago
Crude Oil	94.20	84.44
Gold	1308.12	1710.93

Bond Rates

	Last	1-month ago
2-year treasury	0.31	0.34
10-year treasury	2.75	2.65
10-year municipal (TEY)	4.31	4.34

Treasury Yield Curve – 11/08/2013

S&P Sector Performance (YTD) – 11/08/2013

Economic Calendar

November 11th	—	Veterans Day (bond market closed)
November 13ed	—	Import Prices (October)
November 14th	—	Jobless Claims (seek ending November 9th) Productivity (3Q13, preliminary) Trade Balance (September) Yellen Nomination Hearing (Senate Banking Committee)
November 15th	—	Empire State Manufacturing Index (November) Industrial Production (October)
November 20th	—	Consumer Price Index (October) Retail Sales (October) FOMC Minutes (October 29th-30th)

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 November 7th, 2013.

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