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Clarksville Weekly Market Snapshot from Frazier Allen for the week of July 24th, 2016

Posted By Clarksville Online News Staff On Sunday, July 24, 2016 @ 5:06 pm In Business | No Comments

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The economic data calendar was thin and reports were of little consequence for the markets. As expected, the European Central Bank left short-term interest rates unchanged and did not alter its asset purchase plans.

ECB President Draghi indicated that policymakers were encouraged by the financial stability following the initial reaction to the Brexit vote. He also said that more information will become available over time and the ECB would act using all possible tools “if needed.”

Frazier Allen

Frazier Allen

Building permits rose as expected, reflecting continued strength in single-family activity in recent months, but with some pullback in multi-family activity (following unusual strength last year). Existing home sales were a little stronger than anticipated in June, despite evidence of some supply constraints.

Next week, the economic calendar begins to heat up again. The Consumer Confidence Index and durable goods orders have some market-moving potential, but there are more important items on the calendar.

The Federal Open Market Committee is widely expected to leave short-term interest rates unchanged. There is no Yellen press conference or revised Fed projections, so investors will look to the policy statement for clues about the likelihood of a rate hike in September or December.

Real GDP growth is expected to have picked up sharply in the second quarter (following a soft 1Q16), but annual benchmark revisions will add to the uncertainty (and we may see the estimate of 2015 growth revised lower).

The Employment Cost Index may not get much attention from the markets (it arrives at the same time as GDP), but Fed officials see the report as an important gauge of inflation pressure (the year-over-year pace is expected to accelerate).

Indices

Last Last Week YTD return %
DJIA 18517.23 18506.41 6.27%
NASDAQ 5073.90 5034.06 1.33%
S&P 500 2165.17 2163.75 5.93%
MSCI EAFE 1657.14 1654.42 -3.45%
Russell 2000 1203.86 1202.17 5.98%

 

Consumer Money Rates

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.40 0.13
30-year mortgage 3.44 4.04

 

Currencies

Last 1 year ago
Dollars per British Pound 1.323 1.561
Dollars per Euro 1.103 1.093
Japanese Yen per Dollar 105.82 123.97
Canadian Dollars per Dollar 1.309 1.303
Mexican Peso per Dollar 18.577 16.103

 

Commodities

Last 1 year ago
Crude Oil 44.75 49.19
Gold 1331.00 1091.50

 

Bond Rates

Last 1 month ago
2-year treasury 0.71 0.60
10-year treasury 1.58 1.54
10-year municipal (TEY) 2.26 2.35

 

Treasury Yield Curve – 07/22/2016

As of close of business 07/21/2016

Treasury Yield Curve - 07-22-2016

Economic Calendar

July 26 New Home Sales (June)
Consumer Confidence (July)
July 27 Durable Goods Orders (June)
Pending Home Sales Index (June)
FOMC Policy Decision (no press conference)
July 28 Jobless Claims (week ending July 23)
Advance Economic Indicators (June)
July 29 Employment Cost Index (2Q16)
Real GDP (2Q16 + annual benchmark revisions)
Chicago Purchasing Managers Index (July)

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 July 21st, 2016.

©2016 Raymond James Financial Services, Inc. member FINRA [2] / SIPC [3].


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