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Clarksville Weekly Market Snapshot from Frazier Allen for the week of March 13th, 2016

 

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The economic calendar was thin. Jobless claims fell more than expected (not too unusual), while the four-week average remained very low (about as low as it can go given the normal labor market frictions). Small business optimism fell in February. The Quarterly Services Survey pointed to an upward revision to the estimate of consumer spending growth for 4Q15.

The European Central Bank surprised the markets by doing much more than expected (lowering interest rates, expanding QE, and making other efforts to boost growth).

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Frazier Allen

Enthusiasm was quickly tempered, however, when ECB President Draghi, in his post-meeting press conference, indicated that further stimulus was unlikely. The euro, down 1.6% against the dollar on the ECB’s action, reversed to up 1.8% – an exceptionally large intraday swing.

Next week, the economic calendar is unusually busy on Tuesday and Wednesday, but the focus will be on the Fed.

The Federal Open Market Committee is widely expected to leave short-term interest rates unchanged. The wording of the policy statement is likely to change slightly. Fed officials will revise their economic projections.

However, the growth outlook is expected to be only modestly softer than what was expected in December. The dots in the dot plot (officials’ expectations of the appropriate year-end target rates for federal funds) ought to drift a little lower, but remain well above market expectations.

Fed Chair Yellen is expected to present more detail than she did in her congressional testimony last month. The Fed is expected to remain in tightening mode, eyeing job market improvement and an expected upturn in inflation. However, concerns about financial stability should keep policy on hold in the near term.

Indices

Last Last Week YTD return %
DJIA 16995.13 16943.90 -2.47%
NASDAQ 4662.16 4707.42 -6.89%
S&P 500 1989.57 1993.40 -2.66%
MSCI EAFE 1612.15 1611.70 -6.07%
Russell 2000 1063.99 1076.05 -6.33%

Consumer Money Rates

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.36 0.12
30-year mortgage 3.82 3.86

Currencies

Last 1 year ago
Dollars per British Pound 1.428 1.493
Dollars per Euro 1.118 1.055
Japanese Yen per Dollar 113.190 121.290
Canadian Dollars per Dollar 1.335 1.275
Mexican Peso per Dollar 17.806 15.496

Commodities

Last 1 year ago
Crude Oil 37.84 48.17
Gold 1272.80 1150.60

Bond Rates

Last 1 month ago
2-year treasury 0.95 0.65
10-year treasury 1.95 1.67
10-year municipal (TEY) 2.86 2.42

Treasury Yield Curve – 03/11/2016

As of close of business 03/10/2016

Treasury Yield Curve – 03/11/2016

Economic Calendar

March 15th Producer Price Index (February)
Retail Sales
Empire State Manufacturing Index (March)
March 16th Consumer Price Index (February)
Building Permits, Housing Starts (February)
Industrial Production (February)
FOMC Policy Decision, Revised Fed Projections
Yellen Press Conference
March 17th Jobless Claims (week ending March 12)
Leading Economic Indicators (February)
UM Consumer Sentiment (mid-March)
March 24th Durable Goods Orders (February)
March 25th Good Friday Holiday (markets closed)

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 March 10th, 2016.

©2016 Raymond James Financial Services, Inc. member FINRA / SIPC.


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