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Clarksville, TN – The minutes of the October 29th-30th Federal Open Market Committee meeting showed that monetary policymakers still expected the economy to improve in line with their earlier projections “and would thus warrant trimming the pace of purchases in coming months.”
Officials also considered scenarios where the Fed could taper “before an unambiguous further improvement in the outlook was apparent.” The stock market pulled back a bit on the taper talk, but rose to new highs anyway.The economic data remained consistent with moderate growth. Retail sales rose by 0.4% in October, up 0.2% excluding autos, held down partly by lower gasoline prices. Gasoline was also a factor in the Consumer Price Index, which fell 0.2% in September (+1.0% from a year ago), up 0.1% ex-food & energy.
Existing home sales fell 3.2% in October, following 1.9% decline in September. The National Association of Realtors cited continued supply constraints and a decrease in affordability (higher prices and higher mortgage rates), but the government shut down may have played a small role.
Next week, some important economic data reports will arrive before the holiday. The Pending Home Sales Index should provide further insight into the housing sector. Two months of residential construction data will arrive on Tuesday, along with the advance estimate of consumer confidence.
Durable goods orders are expected to reflect a drop in aircraft orders at Boeing. Ex-transportation, durable goods orders and shipments have been trending at a relatively lackluster pace. The markets will close early on Friday. Have a Happy Thanksgiving!
Consumer Money Rates
Treasury Yield Curve – 11/22/2013
S&P Sector Performance (YTD) – 11/22/2013
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 November 21st, 2013.
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
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