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Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 16th, 2014

Posted By Frazier Allen On Sunday, November 16, 2014 @ 12:00 pm In Business | No Comments

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The economic calendar was thin. The report on retail sales, the only significant release during the week, was a little better than expected, restrained by the decline in gasoline prices. Note that lower gasoline prices should provide some support for consumer spending in the important holiday shopping season.

However, that support is likely to merely offset the impact of sluggish wage growth (leading to “okay” holiday sales). The impact of lower gasoline prices on consumer spending depends on how low gasoline prices go and how long they stay low, but usually arrives with a lag.

Frazier Allen

Frazier Allen

If sustained, the drop in gasoline prices is more likely to benefit the consumer in the first half of 2015.

However, the University of Michigan’s consumer sentiment index rose more than expected in the mid-November reading – and that likely reflects lower gasoline prices.

Next week, the economic calendar picks up again. The mid-month data are expected to reflect moderately strong growth in the overall economy. Seasonal adjustment can be tricky in November, especially in residential construction (where adjustment can magnify weather effects).

The inflation reports are expected to be mild. The soft global economy has put downward pressure on commodity prices. Lower gasoline prices will restrain the headline CPI number, but core inflation is expected to remain at a low trend.

The markets are likely to be more interested in the minutes from the Fed policy meeting of late October. The October 29th policy statement was not as dovish as anticipated. Many expect a low trend in inflation to lead to a delay in the Fed’s initial rate hike.

However, there was no signal of concern from the Fed. In contrast, in the first half of this year, the Federal Open Market Committee repeatedly noted that too-low inflation can generate some problems for the economy.

We did get one formal dissent at that meeting (Minneapolis Fed President Kocherlakota, who wanted to keep QE3 going for a while longer). However, the minutes are likely to show a range of opinions regarding the inflation outlook – and we could see the financial markets react to certain quotes.


Last Last Week YTD return %
DJIA 17652.79 17554.47 6.49%
NASDAQ 4680.14 4638.47 12.06%
S&P 500 2039.33 2031.21 10.33%
MSCI EAFE 1812.60 1804.10 -5.38%
Russell 2000 1175.42 1171.86 1.01%

 Consumer Money Rates

Last 1 year ago
Prime Rate 3.25 3.25
Fed Funds 0.08 0.08
30-year mortgage 4.01 4.35


Last 1 year ago
Dollars per British Pound 1.576 1.595
Dollars per Euro 1.247 1.342
Japanese Yen per Dollar 115.530 99.560
Canadian Dollars per Dollar 1.131 1.050
Mexican Peso per Dollar 13.557 13.184


Last 1 year ago
Crude Oil 74.21 93.88
Gold 1163.04 1276.36

 Bond Rates

Last 1 month ago
2-year treasury 0.54 0.37
10-year treasury 2.36 2.21
10-year municipal (TEY) 3.46 3.23


Treasury Yield Curve – 11/14/2014

Treasury Yield Curve – 11/14/2014

S&P Sector Performance (YTD) – 11/14/2014

S&P Sector Performance (YTD) – 11/14/2014

Economic Calendar

November 17th Industrial Production (October)
November 18th Producer Price Index (October)
Homebuilder Sentiment (November)
November 19th Building Permits, Housing Starts (October)
FOMC Minutes (October 28th-29th)
November 20th Jobless Claims (week ending November 15th)
Consumer Price Index (October)
Real Weekly Earnings (October)
Existing Home Sales (October)
Leading Economic Indicators (October)
November 25th Real GDP (3Q14, 2nd estimate)
Consumer Confidence (October)
November 26th Durable Goods Orders (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 November 13th, 2014.

©2014 Raymond James Financial Services, Inc. member FINRA [2] / SIPC [3].

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