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Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 2nd, 2016

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – Real GDP rose at a 2.9% annual rate in the advance estimate of third quarter growth, a bit on the high side of expectations. However, the economy was not as strong as the headline figure suggests (similarly, growth over the four previous quarters was not as weak as the GDP number implies).

Inventories, which had been slowing over the five previous quarters (subtracting from GDP growth), rose at a faster pace (adding 0.6 percentage point to overall growth). Net exports (a narrower trade deficit) added 0.8 percentage point.

Frazier Allen
Frazier Allen

Private Domestic Final Purchases (consumer spending, business fixed investment, and residential homebuilding), a measure of domestic demand, rose at a 1.6% annual rate (vs. +2.3% over the four previous quarters).

The Conference Board’s Consumer Confidence Index and the University of Michigan’s Consumer Sentiment Index both retreated in October – but while respondents were less optimistic regarding the outlook for the economy, they were still feeling pretty good about their personal finances. 

Earnings reports remained the key driver for stocks, but results were mixed, keeping the major market averages within their recent ranges. Bond yields rose, but not due to fears of tighter Fed policy or higher inflation. Rather, long-term interest rates advanced overseas (partly on stronger-than-expected growth in the United Kingdom, which has yet to enter Brexit negotiations). 

Next week, earnings reports will still matter, but the economic calendar is busy with fresh October figures. The ISM surveys have some potential to surprise (and hence, to move the markets), but the focus is expected to be on Friday’s job market data.

Nonfarm payrolls are expected to have risen at a moderate pace. The unemployment rate should hold steady or edge slightly lower, as those on the sidelines (not officially counted as “unemployed,” but wanting a job) return to the labor force. Average hourly earnings are expected to have risen moderately.

There is clear internal pressure for the Fed to raise short-term interest rates, but the FOMC said it could afford to wait for more information at the September meeting, and we haven’t really added much to the outlooks for the job market and inflation since then.


  Last Last Week YTD return %
DJIA 18169.68 18162.35 4.27%
NASDAQ 5215.98 5241.83 4.17%
S&P 500 2133.04 2141.34 4.36%
MSCI EAFE 1667.18 1679.83 -2.86%
Russell 2000 1189.95 1219.79 4.76%


Consumer Money Rates

  Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.41 0.12
30-year mortgage 3.61 3.76



  Last 1 year ago
Dollars per British Pound 1.216 1.526
Dollars per Euro 1.090 1.092
Japanese Yen per Dollar 105.29 121.09
Canadian Dollars per Dollar 1.339 1.319
Mexican Peso per Dollar 18.840 16.639



  Last 1 year ago
Crude Oil 49.72 45.94
Gold 1269.50 1176.10


Bond Rates

  Last 1 month ago
2-year treasury 0.88 0.73
10-year treasury 1.86 1.54
10-year municipal (TEY) 2.71 2.32


Treasury Yield Curve – 10/28/2016

As of close of business 10/27/2016

Treasury Yield Curve – 10/28/2016

S&P Sector Performance (YTD) – 10/28/2016

As of close of business 10/27/2016

S&P Sector Performance (YTD) – 10/28/2016

Economic Calendar

October 31  —  Personal Income and Spending (September)
   —  Chicago Business Barometer (October)
November 1  —  ISM Manufacturing Index (October)
   —  Motor Vehicle Sales (October)
   —  Pending Home Sales Index (September)
November 2  —  ADP Payroll Estimate (October)
   —  FOMC Policy Decision (no press conference)
November 3  —  Jobless Claims (week ending October 29)
   —  NF Productivity (3Q16, preliminary)
   —  ISM Non-Manufacturing Index (October)
November 4  —  Employment Report (October)
   —  Trade Balance (September)
November 8  —  Election Day
November 11  —  Veterans Day Holiday (bond market closed)
November 15  —  Retail Sales (October)
November 24  —  Thanksgiving Holiday (markets closed)
December 2  —  Employment Report (November)
December 14  —  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 October 27th, 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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