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Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 2nd, 2014

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – As expected, the Federal Open Market Committee brought the large-scale asset purchase program (QE3) to an end and repeated that it expects conditions to warrant exceptionally low levels of the federal funds rate “for a considerable time.”

The policy statement was viewed as more hawkish (or less dovish) than anticipated. The FOMC noted that the slack in the job market is “diminishing gradually” (in the previous statement, slack was described as “significant”). The Fed added that the initial increase in short-term interest rates likely would come sooner if the economy is stronger than anticipated or later if the economy disappoints.

Frazier Allen
Frazier Allen

Fed Chair Yellen had said as much previously, but this was the first time this notion appeared in the policy statement. Officials did not seem to be worried about the recent downward pressure on inflation (which many observers have seen as likely delaying the first rate hike).

Real GDP rose at a 3.5% annual rate in advance estimate for the third quarter, boosted by a narrower trade deficit and a surge in defense spending. Domestic Final Sales, which excludes net exports and the change in inventories (a better measure of underlying domestic demand) rose at a 2.7% annual rate, but would have been about 2.0% if not for the pop in defense.

Real consumer spending rose at a 1.8% annual rate in 3Q14, while the monthly data showed a 0.2% decline in September (poor momentum heading toward 4Q14). The PCE Price Index rose 1.5% y/y, well below the Fed’s 2% goal.

The Bank of Japan expanded its quantitative easing program.

Next week, fresh figures for October begin to arrive, with the ISM Manufacturing Index on Monday and the Employment Report on Friday. Payrolls are likely to post a moderately strong gain (early consensus: about +220,000), while the unemployment rate should hold about steady (at 5.9%). The ECB policy meeting is on Thursday, but it is likely too soon for the central bank to announce quantitative easing.


Last Last Week YTD return %
DJIA 17195.42 16677.90 3.73%
NASDAQ 4566.14 4452.79 9.33%
S&P 500 1994.65 1950.82 7.91%
MSCI EAFE 1798.61 1776.57 -6.11%
Russell 2000 1155.77 1116.49 -0.68%


Consumer Money Rates

Last 1 year ago
Prime Rate 3.25 3.25
Fed Funds 0.05 0.04
30-year mortgage 3.98 4.10



Last 1 year ago
Dollars per British Pound 1.601 1.607
Dollars per Euro 1.259 1.376
Japanese Yen per Dollar 109.020 98.280
Canadian Dollars per Dollar 1.119 1.045
Mexican Peso per Dollar 13.475 12.888



Last 1 year ago
Crude Oil 81.12 96.77
Gold 1205.44 1349.88


Bond Rates

Last 1 month ago
2-year treasury 0.49 0.58
10-year treasury 2.34 2.46
10-year municipal (TEY) 3.25 3.43


Treasury Yield Curve – 10/31/2014

Treasury Yield Curve – 10/31/2014


S&P Sector Performance (YTD) – 10/31/2014

S&P Sector Performance (YTD) – 10/31/2014

 Economic Calendar

November 3rd ISM Manufacturing Index (October)
Motor Vehicle Sales (October)
November 4th Election Day
Trade Balance (September)
November 5th ADP Payroll Estimate (October)
ISM Non-Manufacturing Index (October)
November 6th ECB Policy Meeting
Jobless Claims (week ending November 1)
November 7th Employment Report (October)
November 11 th Veterans Day (bond market closed)
November 14th Retail Sales (October)

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 October 30th, 2014.

©2014 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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