Clarksville Weekly Market Snapshot from Frazier Allen for the week of May 17th, 2015

Clarksville, TN – The mid-month economic data disappointed. Retail sales were weaker than anticipated in April. Industrial production fell short of expectations. Consumer sentiment slid in the mid-May assessment.

However, weekly claims for unemployment benefits remained remarkably low. The reports on import prices and producer prices continued to show disinflationary pressures.

Real GDP for the euro area rose 0.4% q/q (a 1.7% annual rate) in the flash estimate for the first quarter. Bond yields in Europe moved higher, but seemed to meet some resistance.

Next week, the economic data reports have some potential to move the markets (provided we see a big enough surprise relative to expectations). However, the focus is expected to be on the Fed.

In its April 29th policy statement, the FOMC recognized that “economic growth slowed during the winter months, in part reflecting transitory factors.” However, while the 1Q15 slowdown was seen as temporary, there may have been some concern about a more extended period of lackluster growth. We may get some answers in the FOMC meeting minutes.

More importantly, speeches by Vice Chair Stanley Fischer and Chair Janet Yellen, later in the week, will give us a more up-to-date assessment of how the Fed sees the current situation. Fischer will speak about the euro area outlook (which has some implications for bond yields and exchange rates), while Yellen (speaking in the early afternoon Friday) will specifically address the U.S. economic outlook.

Important Disclosures

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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 May 14th, 2015.

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