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Clarksville Weekly Market Snapshot from Frazier Allen for the week of May 6th, 2015
Posted By Frazier Allen On Wednesday, May 6, 2015 @ 4:00 pm In Business | No Comments
Clarksville, TN – GDP growth slowed to a 0.2% annual rate in the advance estimate for 1Q15, reflecting a variety of restraints (weather, West Coast port delays, the strong dollar, and a contraction in energy exploration), many of which are likely to be transitional. Consumer spending rose at a 1.9% pace (vs. +4.4% in 4Q14). Business investment fell, with “mining exploration, shafts, and wells” falling at a 48.7% annual rate.
Inventories rose more than anticipated, adding 0.7 percentage point to growth. Net exports subtracted 1.3 percentage points. Personal income was flat in March, but inflation-adjusted disposable income rose at a 6.2% annual rate in 1Q15 (which is likely to support consumer spending growth in 2Q15).
As expected, the Federal Open Market Committee left policy unchanged and provided no further guidance on the timing of the first rate hike. The FOMC recognized that growth slowed in the first quarter, but saw that as reflecting “transitory factors.”
The financial markets didn’t react much to the economic data or the Fed policy statement. Stock market volatility remained elevated. Treasury yields moved higher, mirroring an increase in bonds yields in Germany.
Next week, the focus is expected to be on the April employment figures (Friday). Weather was a factor during the March payroll survey week, so we should see a rebound in job growth. However, the underlying trend has moderated relatively to the very strong pace seen in the final months of 2014. The ADP estimate of private-sector payrolls (Wednesday) is not a good predictor of the official Bureau of Labor Statistics data, but the markets can react if we get a surprise.
Note that the ADP figures have a breakout by size of firms. March figures suggested a slowing in hiring at large firms, but continued strength at small and medium-sized firms. The markets could react to other developments, including the news out of Europe.
|Last||Last Week||YTD return %|
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.543||1.682|
|Dollars per Euro||1.119||1.383|
|Japanese Yen per Dollar||118.950||102.570|
|Canadian Dollars per Dollar||1.204||1.097|
|Mexican Peso per Dollar||15.260||13.097|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||3.28||3.04|
|May 4th||—||Factory Orders (March))|
|May 5th||—||Trade Balance (March)
ISM Non-Manufacturing Index (April)
|May 6th||—||Trade Balance (March)
ADP Payroll Estimate (April)
|May 7th||—||Jobless Claims (week ending May 2nd)
|May 8th||—||Trade Balance (March)
Employment Report (April)
|May 13th||—||Retail Sales (April)|
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 April 30th, 2015.
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