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Clarksville Weekly Market Snapshot from Frazier Allen for the week of January 26th, 2014

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – With a thin economic calendar, U.S. investors typically focus on other things. Sometimes, that’s earnings reports (which have been generally good). Other times, it’s overseas developments.

While the economic situation seems to be improving in the United Kingdom and in Europe, the rest of the world is looking a bit shakier. There have been a number of concerns about individual countries in recent weeks (China, Turkey, Argentina, and so on), but these concerns appear to have now gelled into anxieties about emerging economies in general, which has weighed against U.S. stock market sentiment.

Frazier Allen
Frazier Allen

Bond yields have declined, which should help support the economy in the near term (housing especially).

The U.S. outlook remains positive, with widespread expectations of a pickup in growth as economic headwinds fade.

However, for market participants, the key question is how much good news is already baked in. Note that the weather and seasonal adjustment often generate volatility in the economic data during the winter months. We may see the markets react to the noise.

Next week, U.S. investors can at least take some comfort in that the busy economic calendar will take the focus away from concerns about the rest of the world. We could easily see some surprises in the reports on new home sales (Monday) and durable goods orders (Tuesday).

President Barack Obama is reportedly going to stress income inequality in his State of the Union address on Tuesday evening. The FOMC is widely expected to trim another $10 billion from the monthly pace of asset purchases, but markets could react to any changes in the wording of the policy statement.

The initial GDP estimate for 4Q13, arriving a day later, is likely to be strong, but there’s a lot of uncertainty in the advance numbers. The fun won’t let up the following week, when we get the ISM survey results and employment figures.

Indices

  Last Last Week YTD return %
DJIA 16197.35 16417.01 -2.29%
NASDAQ 4218.88 4218.69 1.01%
S&P 500 1828.46 1845.89 -1.08%
MSCI EAFE 1916.36 1916.40 0.04%
Russell 2000 1172.40 1173.13 0.75%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.07 0.16
30-year mortgage 4.39 3.42

Currencies

  Last 1-year ago
Dollars per British Pound 1.662 1.584
Dollars per Euro 1.368 1.331
Japanese Yen per Dollar 103.470 88.550
Canadian Dollars per Dollar 1.116 0.999
Mexican Peso per Dollar 13.398 12.658

Commodities

  Last 1-year ago
Crude Oil 97.37 94.58
Gold 1262.23 1687.15

Bond Rates

  Last 1-month ago
2-year treasury 0.34 0.40
10-year treasury 2.74 3.00
10-year municipal (TEY) 4.45 4.51

Treasury Yield Curve – 01/24/2014

Treasury Yield Curve – 01/24/2014

S&P Sector Performance (YTD) – 01/24/2014

S&P Sector Performance (YTD) – 01/24/2014

Economic Calendar

January 27th

 —

New Home Sales (December)
January 28th

 —

Durable Goods Orders (December)
Consumer Confidence (January)
State of the Union Address
January 29th

 —

Treasury FRN Auction
FOMC Policy Decision, no press briefing
January 30th

 —

Jobless Claims (week ending January 25th)
Real GDP (4Q13, advance estimate)
Pending Home Sales Index (December)
January 31st

 —

Employment Cost Index (4Q13)
Personal Income and Spending (January)
Chicago Purchasing Managers Index (January)
February 3rd

 —

ISM Manufacturing Index (January)

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 January 16th, 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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