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Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 7th, 2016

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – As expected, the Federal Open Market Committee left short-term interest rates unchanged. In its policy statement, the FOMC noted that “on balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months.”

More importantly, “near-term risks to the economic outlook have diminished.” Kansas City Fed President Esther George dissented in favor of raising the federal funds target range by 25 basis points (to 0.50% to 0.75%).

Frazier Allen
Frazier Allen

Real GDP rose at a 1.2% annual rate in the advance estimate for 2Q16, much weaker than anticipated, reflecting a sharp slowing in inventory growth.

In fact, inventory growth turned negative (for the first time since 3Q11). Final Sales (GDP less the change in inventories) rose at a 2.6% annual rate. Consumer spending rose at a 4.2% pace (a 2.9% average for the first half of the year). Most other components were soft.

This week, the economic calendar will be busy. The ISM surveys for July will help to fill in the picture for early 3Q16. Global investors will look to the Bank of England to ease monetary policy ahead of an expected drag from Brexit. The July Employment Report will help set near-term expectations for the economy and Fed policy.

Nonfarm payrolls were choppy in May and June (reflecting statistical uncertainty), but the underlying trend has slowed (likely due to both greater caution in hiring and a tighter job market). Seasonal adjustment will be tricky (due to the end of the school year).


Last Last Week YTD return %
DJIA 18422.73 18517.23 5.73%
NASDAQ 5160.89 5073.90 3.06%
S&P 500 2168.64 2165.17 6.10%
MSCI EAFE 1658.16 1657.14 -3.39%
Russell 2000 1215.34 1203.86 6.99%


Consumer Money Rates

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.30 0.14
30-year mortgage 3.39 3.98



Last 1 year ago
Dollars per British Pound 1.316 1.560
Dollars per Euro 1.108 1.098
Japanese Yen per Dollar 105.27 123.94
Canadian Dollars per Dollar 1.316 1.295
Mexican Peso per Dollar 18.893 16.291



Last 1 year ago
Crude Oil 41.14 48.79
Gold 1341.20 1093.30


Bond Rates

Last 1 month ago
2-year treasury 0.69 0.56
10-year treasury 1.50 1.43
10-year municipal (TEY) 2.25 2.09


Economic Calendar

August 1 ISM Manufacturing Index (July)
August 2 Personal Income and Spending (June)
Unit Auto Sales (July)
August 3 ADP Payroll Estimate (July)
ISM Non-Manufacturing Index (July)
August 4 BOE Policy Decision
Jobless Claims (week ending July 30)
August 5 Employment Report (July)
Trade Balance (June)

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 28th, 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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