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Clarksville Weekly Market Snapshot from Frazier Allen for the week of June 29th, 2015

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The week began with a renewed sense of optimism that a Greek debt deal would be worked out. Sentiment then faded after negotiations with Greece’s creditors broke down, but then hopes continued that a deal would be reached over the weekend.

The economic data were mixed. Home sales figures improved in May. Durable goods orders were disappointing. The estimate of 1Q15 GDP was revised to show a -0.2% annual rate (vs. -0.7% in the second estimate), up 3.0% from a year ago. Note that the estimate of Gross Domestic Income rose at a 1.9% annual rate (+3.7% y/y).

Frazier Allen
Frazier Allen

The May personal income and spending suggested that inflation-adjusted consumer spending (70% of GDP) was on track for about a 3.0% annual rate in 2Q15. The University of Michigan’s Consumer Sentiment Index rose more than expected in the full-month reading for June, with a sharp rise in expectations (thought to be a driver of big ticket spending).

Next week, fresh June data will arrive. With Fed policy decisions being data-dependent, financial market participants are likely to react sharply to any surprises. The ADP figures, the Consumer Confidence Index and the ISM manufacturing data have plenty of market-moving potential, but most of the weight will be on the Employment Report (released a day sooner than usual due to Friday’s holiday).

Payroll figures for June will be subject to seasonal adjustment issues (in June 2014, prior to seasonal adjustment, we lost over 800,000 jobs in education, but gained about 1.4 million non-education jobs). One should really concentrate on the three-month average gain in payrolls, but the markets will likely focus solely on the June figure (which will be subject to revision). Note that neither the stock market nor the bond market will close early on Thursday, although market activity is expected to thin out by the afternoon.

Indices

Last Last Week YTD return %
DJIA 17890.36 18115.84 0.38%
NASDAQ 5112.19 5132.95 7.94%
S&P 500 2102.31 2121.24 2.11%
MSCI EAFE 1910.10 1881.39 7.62%
Russell 2000 1283.28 1284.68 6.52%

Consumer Money Rates

Last 1 year ago
Prime Rate 3.25 3.25
Fed Funds 0.13 0.09
30-year mortgage 4.14 4.17

Currencies

Last 1 year ago
Dollars per British Pound 1.571 1.697
Dollars per Euro 1.120 1.360
Japanese Yen per Dollar 123.660 101.930
Canadian Dollars per Dollar 1.239 1.074
Mexican Peso per Dollar 15.473 13.054

Commodities

Last 1 year ago
Crude Oil 59.55 107.25
Gold 1173.91 1313.27

Bond Rates

Last 1 month ago
2-year treasury 0.71 0.61
10-year treasury 2.45 2.11
10-year municipal (TEY) 3.66 3.57

Treasury Yield Curve – 06/26/2015

As of close of business 6/25/2015

Treasury Yield Curve – 06/26/2015

 

S&P Sector Performance (YTD) – 06/26/2015

As of close of business 6/25/2015

S&P Sector Performance (YTD) – 06/26/2015

 

Economic Calendar

June 29th Pending Home Sales Index (May)
June 30th Consumer Confidence Index (June)
July 1st ADP Payroll Estimate (June)
ISM Manufacturing Index (June)
Motor Vehicle Sales (June)
July 2nd Employment Report (June)
July 3rd Independence Day Holiday (observed, markets closed)
July 6th ISM Non-Manufacturing Index (June)
July 8th FOMC Minutes (June 16th-17th)

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 June 25th, 2015.

©2015 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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