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Clarksville Weekly Market Snapshot from Frazier Allen for the week of September 18th, 2016

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – Fed Governor Lael Brainard, a dove, presented her case for why the central bank should delay an increase in short-term interest rates. While her views are her own (not representative of the Fed as a whole), a more hawkish tilt would have raised the odds of a September rate hike.

The key economic data reports were on the soft side of expectations, but were still consistent with moderate growth in the near term. Retail sales disappointed in August. Industrial production unwound a seasonal quirk that boosted July figures. CPI figures surprise slightly to the upside.

Frazier Allen
Frazier Allen

Next week, the focus will be on the Fed policy meeting. Momentum for a September hike had been building in late August and Chair Yellen sent a clear signal in Jackson Hole (“the case for an increase in the federal funds rate has strengthened”).

However, the financial markets never fully bought into it and recent economic data have been generally soft (but not horrible). All else equal, the Fed does not want to shock the financial markets with a surprise (although there is still a small chance that it could move).

The wording of the policy statement is expected to suggest that officials remain in tightening mode (that is, looking to raise rates), most likely in December (but the timing will still be data-dependent.

Officials will revise their projections of growth, unemployment, and inflation, and we’ll get a new dot plot (the dots representing officials’ expectations of the year-end federal funds target rate).

Once again, the dots should drift a little lower. Expectations of the long-term equilibrium federal funds rate are also likely to decline. In her press conference, Chair Yellen will explain why the Fed is delaying, but still signal the need to resume normalization at some point.


Last Last Week YTD return %
DJIA 18212.48 18479.91 4.52%
NASDAQ 5249.69 5259.48 4.84%
S&P 500 2147.26 2181.30 5.05%
MSCI EAFE 1676.17 1732.92 -2.34%
Russell 2000 1227.02 1258.36 8.02%


Consumer Money Rates

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.40 0.13
30-year mortgage 3.47 3.91



Last 1 year ago
Dollars per British Pound 1.324 1.549
Dollars per Euro 1.124 1.129
Japanese Yen per Dollar 102.10 120.57
Canadian Dollars per Dollar 1.316 1.317
Mexican Peso per Dollar 19.345 16.548



Last 1 year ago
Crude Oil 43.91 47.15
Gold 1318.00 1119.00


Bond Rates

Last 1 month ago
2-year treasury 0.74 0.73
10-year treasury 1.69 1.56
10-year municipal (TEY) 2.40 2.18


Treasury Yield Curve – 09/16/2016

As of close of business 09/15/2016

Treasury Yield Curve – 09/16/2016


S&P Sector Performance (YTD) – 09/16/2016

As of close of business 09/15/2016

S&P Sector Performance (YTD) – 09/16/2016


Economic Calendar

September 19 Homebuilder Sentiment (September)
September 20 Building Permits, Housing Starts (August)
September 21 FOMC Policy Decision (Yellen press conference)
September 22 Jobless Claims (week ending September 17)
Existing Home Sales (August)
Leading Economic Indicators (August)

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 September 15th, 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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