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Clarksville Weekly Market Snapshot from Frazier Allen for the week of June 5th, 2016

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The economic data reports were mixed, but mostly on the soft side of expectations. The ISM Manufacturing Index surprised (modestly) to the upside, boosted by a lengthening in supplier delivery times (anecdotally, many firms had trimmed inventories in anticipation of softer demand, but sales surprised and they are now scrambling a bit to restock).

The Conference Board’s Consumer Confidence Index slid. Unit auto sales were strong, but were supported by an increase in fleet sales (rental cars, etc.). The ADP estimate of private-sector payrolls was moderate strong, with continued hiring at small and medium-sized firms.

Frazier Allen
Frazier Allen

The Beige Book noted “modest” growth across the 12 Federal Reserve districts and gave an eerily preview of the employment report (job growth was generally described as “modest,” while there were widespread reports of tighter labor market conditions).

The May Employment Report was weaker than expected. Nonfarm payrolls rose by 38,000, well below expectations (median forecast: +160,000, which included an impact from the strike at Verizon). Figures for March and April were revised a net -59,000. One month does not make a trend, but the revisions give more weight to the view that job growth has slowed. The question is why.

Statistical noise may be a factor (monthly figures are reported accurate to ±115,000). A mild winter may have pulled forward job gains into the early spring. Firms have become more cautious (as evidenced in weak capital spending), which has possibly carried through to hiring.

Firms may have had trouble finding qualified workers (willing to work for what the firms want to pay). It’s unclear, but figures for June and July will be important. The unemployment rate fell to 4.7% in May (from 5.0%), but most of that was due to a drop in labor force participation (down in the last two months, interrupting an increasing trend over the last year).

Next week, “the month of Janet Yellen” kicks off with a speech on the economy and monetary policy. A week later, Yellen will conduct a post-FOMC press conference, and a week after that, she will present her semi-annual monetary policy testimony to Congress. Even with the recent data, the Fed is still in tightening mode, looking to resume the normalization of monetary policy. However, the data also suggest that officials will be in no hurry.


Last Last Week YTD return %
DJIA 17838.56 17847.30 2.37%
NASDAQ 4971.36 4910.33 -0.72%
S&P 500 2105.26 2090.10 3.00%
MSCI EAFE 1652.98 1669.84 -3.69%
Russell 2000 1170.58 1139.75 3.05%


Consumer Money Rates

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.38 0.13
30-year mortgage 3.71 3.87



Last 1 year ago
Dollars per British Pound 1.442 1.534
Dollars per Euro 1.115 1.128
Japanese Yen per Dollar 108.87 124.25
Canadian Dollars per Dollar 1.310 1.245
Mexican Peso per Dollar 18.677 15.518



Last 1 year ago
Crude Oil 49.17 59.64
Gold 1212.60 1184.90


Bond Rates

Last 1 month ago
2-year treasury 0.88 0.73
10-year treasury 1.79 1.74
10-year municipal (TEY) 2.51 2.46


Treasury Yield Curve – 06/03/2016

As of close of business 06/02/2016

Treasury Yield Curve – 06/03/2016


Economic Calendar

June 6 Yellen speaks
June 9 Jobless Claims (week ending June 4)
June 10 UM Consumer Sentiment (mid-June)
June 14 Retail Sales (May)
June 15 FOMC Policy Decision (Yellen 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 June 2nd, 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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