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Clarksville Weekly Market Snapshot from Frazier Allen for the week of May 22nd, 2016

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The FOMC minutes from the April 26th-27th policy meeting showed that “most [meeting] participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee’s 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June.”

However, “participants expressed a range of views about the likelihood that incoming information would make it appropriate to adjust the stance of policy at the time of the next meeting.”

Frazier Allen
Frazier Allen

In other words, a majority of Fed officials believe that a June rate hike would be appropriate under certain conditions, but officials differed in their views of whether those conditions would be met. The minutes served to jolt the financial markets out of their complacency, which held that the Fed might not raise rates at all this year.

As expected, the economic data reports remained consistent with a pickup in economic growth in 2Q16. Some of that likely reflects seasonal adjustment issues related to the early Easter. The Consumer Price Index reflected higher gasoline prices in April, while core inflation remained low.

Industrial production figures reflected a return to more normal temperatures (higher output of utilities) and a rebound in auto production. Ex autos, manufacturing output appears to be trending about flat (mixed across industries).

Next week, the economic calendar thins out somewhat, with a number of second-tier reports for April. The focus may be on the GDP figure, which is expected to be revised higher (+0.5% in the advance estimate).


Last Last Week YTD return %
DJIA 17435.40 17720.50 .06%
NASDAQ 44212.53 4737.34 -5.89%
S&P 500 2040.04 2064.11 -0.19%
MSCI EAFE 1619.49 1645.55 -3.62%
Russell 2000 1094.78 1108.60 -3.62%


Consumer Money Rates

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.37 0.12
30-year mortgage 3.73 3.84



Last 1 year ago
Dollars per British Pound 1.461 1.551
Dollars per Euro 1.120 1.115
Japanese Yen per Dollar 109.96 120.69
Canadian Dollars per Dollar 1.309 1.223
Mexican Peso per Dollar 18.424 15.185



Last 1 year ago
Crude Oil 48.16 57.26
Gold 1254.80 1208.70


Bond Rates

Last 1 month ago
2-year treasury 0.88 0.82
10-year treasury 1.85 1.88
10-year municipal (TEY) 2.42 2.57


Treasury Yield Curve – 05/20/2016

As of close of business 05/19/2016

Treasury Yield Curve – 05/20/2016


Economic Calendar

May 24 New Home Sales (April)
May 25 Advance Trade in Goods (April)
May 26 Jobless Claimes (week ending May 21)
Durable Goods Orders (April)
Pending Home Sales Index (April)
May 27 Real GDP (1Q16 2nd estimate)
UM Consumer Sentiment (May)
May 30 Memorial Day Holiday (markets closed)
May 31 CB Consumer Confidence (May)
June 1 ISM Manufacturing Index (May)
Fed Beige Book
Auto Sales (May)
June 2 ADP Payroll Estimate
June 3 Employment Report (May)
ISM Non-Manufacturing Index (May)
June 15 FOMC Policy Decision (Yellen press conference)
June 23 UK referendum vote on EU Membership
July 27 FOMC Policy Decision (no press conference)

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 May 19th, 2016.

©2016 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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