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Clarksville Weekly Market Snapshot from Frazier Allen for the week of April 6th, 2014

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The data remained consistent with a continued economic recovery. However, it’s unclear how much of the improvement is simply a rebound from bad weather and how much is underlying strength.

The monthly ISM surveys were mixed. Motor vehicle sales rebounded sharply in March (suggesting that bad weather postponed sales, just as we saw with the government shutdown in October). The March Employment Report was close to expectations.

Frazier Allen
Frazier Allen

Nonfarm payrolls rose by 192,000 (vs. a median forecast of +200,000), while figures for January and February were revised a net 37,000 higher.

The unemployment rate held steady at 6.7% (median forecast: 6.6%), due to an increase in labor force participation (that would be a good thing if it continues, but one months does not make a trend). February trade figures showed a wider-than-expected deficit, which suggests that net exports will subtract from GDP growth in 1Q14.

Fed Chair Janet Yellen, perhaps seeking to counter any misconceptions taken from her recent press briefing (that is, the “six months” quote that was taken out of context), emphasized that the central bank was attempting to improve conditions on Main Street, not Wall Street.

She pointed out several signs of slack in the labor market and indicated that the Fed’s “extraordinary (policy) commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers at the Fed.”

Next week, the economic calendar thins out. There may be some interest in the Fed policy meeting minutes. There’s likely to be little new. In her press conference, Yellen already explained what went on. The Fed has published updated economic projections from senior officials.

However, there’s a good chance that the markets (and the financial press) will take something out of context. The recently expanded PPI data have not received much attention from the markets, but that’s largely because there has been much inflation pressure “in the pipeline.”

Indices

  Last Last Week YTD return %
DJIA 16572.55 16264.23 -0.02%
NASDAQ 4237.74 4151.23 1.46%
S&P 500 1888.77 1849.04 2.19%
MSCI EAFE 1924.32 1892.86 0.46%
Russell 2000 1181.12 1151.44 1.50%

Consumer Money Rates

  Last 1-year ago
Prime Rate 3.25 3.25
Fed Funds 0.08 0.15
30-year mortgage 4.41 3.54

Currencies

  Last 1-year ago
Dollars per British Pound 1.659 1.511
Dollars per Euro 1.377 1.282
Japanese Yen per Dollar 103.930 93.500
Canadian Dollars per Dollar 1.101 1.014
Mexican Peso per Dollar 13.116 12.270

Commodities

  Last 1-year ago
Crude Oil 100.29 94.45
Gold 1285.41 1571.33

Bond Rates

  Last 1-month ago
2-year treasury 0.43 0.37
10-year treasury 2.75 2.80
10-year municipal (TEY) 4.58 4.35

Treasury Yield Curve – 4/4/2014

Treasury Yield Curve – 4/4/2014

S&P Sector Performance (YTD) – 4/4/2014

S&P Sector Performance (YTD) – 4/4/2014

Economic Calendar

April 8th

 —

Small Business Optimism (March)
IMF World Economic Outlook (updated)
April 9th

 —

FOMC Minutes (March 18th-19th)
April 10th

 —

Jobless Claims (week ending April 5th)
Import Prices (March)
April 11th

 —

Producer Price Index (March)
April 14th

 —

Retail Sales (March)
April 15th

 —

Consumer Price Index (March)
April 18th

 —

Good Friday (markets closed)
April 30th

 —

Real GDP (1Q14, advance estimate)
FOMC Policy Decision (no press conference)

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 April 3rd, 2013.

©2014 Raymond James Financial Services, Inc. member FINRA / SIPC.

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