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Clarksville, TN – The economic data were generally on the strong side of expectations. Retail sales rose 0.6% in June (median forecast: +0.2%), but figures for April and May were revised down (still a strong quarter).
Industrial production rose 0.6%, but that largely reflected a rebound in auto output (which had fallen in May). Ex-autos, manufacturing output was flat (-0.2% y/y, consistent with a soft patch, not a recession).Brexit fears subsided in the U.S. The U.K. now has a new prime minister, the transition coming months earlier than anticipated.
However, Boris Johnson is now the country’s chief diplomat (LOL). The Bank of England refrained from easing monetary policy, but most officials expect to ease in early August. The DJIA and the S&P 500 hit new highs. Bond yields moved up off their lows.
Next week, the economic data are second-tier and mostly focused on the housing sector – nothing to significantly alter the overall picture. The GOP national convention gets underway on Monday and there is likely to be more interest than usual in the quadrennial gathering (roll call of states on Tuesday).
Consumer Money Rates
Treasury Yield Curve – 07/15/2016
As of close of business 07/14/2016
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.
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 July 14th, 2016.
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
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