« Older: Holiday Pizza Party with Santa at Clarksville’s Governors Square Mall Newer: Walnut Grove Missionary Baptist Church donates van to Leap Organization »
Clarksville, TN – Fear of Fed tapering hung over the stock market. Market participants believed that the November Employment Report would be the deciding factor for whether the Fed will begin to reduce the pace of asset purchases this month.
The jobs report was stronger than anticipated, but not as bad as feared. Payrolls rose by 203,000, a bit more than expected (median forecast: +180,000), with a mild net revision of +8,000 to the two previous months. Job gains were relatively broad-based.The unemployment rate sank to 7.0%, vs. 7.3% in October and 7.2% in September, with improvement concentrated in the teenage and young adult categories. Average weekly hours edged up. Average hourly earnings rose 0.2%, up 2.0% y/y (in comparison, the CPI rose 0.9% over the 12 months ending in October).
The rest of the week’s economic figures were mixed. The ISM Manufacturing Index surprised to the upside, but the nonmanufacturing survey disappointed. Real GDP rose at a 3.6% annual rate in the second estimate for 3Q13 (vs. +2.8% in the advance estimate), but most of that was due to faster inventory growth (which is likely to slow in 4Q13, subtracting significantly from GDP growth).
The Fed’s Beige Book described growth as “modest to moderate” – the same phrase used in the four previous assessments. The Beige Book noted that hiring remained “modest” across the 12 Federal Reserve districts. Wage and price pressures were “contained.”
Next week, the economic calendar is thin, with a clear focus on Thursday’s retail sales data. Investors may be encouraged by the mini budget deal coming out of Washington. Details are still pending, but a compromise should avoid another government shutdown and unnecessary showdown over the debt ceiling.
This isn’t exactly what the budget committee was tasked with (a long-term budget deal), but it should suffice. Spending is expected to be authorized for the full fiscal year (and possibly FY15), preserving the level of sequester cuts, but allowing more leeway in deciding what gets cut. There should be increases in revenue, but not through higher tax rates (closing loopholes, etc.).
Consumer Money Rates
Treasury Yield Curve – 12/6/2013
S&P Sector Performance (YTD) – 12/6/2013
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 December 5th, 2013.
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
TopicsBritish Pound, Clarksville TN, Crude Oil, DJIA, employment, Euro, F&M Investment Services, Fed, Gasoline, GDP, gold, ISM Manufacturing Index, Japanese Yen, Mexican Peso, MSCI EAFE, Nasdaq, Raymond James Investment Services, Russell 2000, S&P 500, U.S. Stock Market, unemployment, Weekly Market Snapshot
© 2006-2020 Clarksville, TN Online is owned and operated by residents of Clarksville Tennessee.