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Clarksville Weekly Market Snapshot from Frazier Allen for the week of February 8th, 2017

F&M Investment Services - Raymond James - Clarksville, TNClarksville, TN – The Federal Open Market Committee left short-term interest rates unchanged, as expected, and tweaked the wording of the policy statement slightly. There were no solid clues as to the timing of the next increase in short-term interest rates, but officials noted the improvement in consumer and business sentiment and seemed a little more confident that inflation “will” increase to the 2% goal.

While January numbers are often suspect due to the magnitude of the seasonal adjustment, the economic data continued to paint a picture of the economy that is in good shape.

Frazier Allen
Frazier Allen

Nonfarm payrolls rose by 227,000, more than expected, but November and December were revised down by a net 39,000 (making it about a wash relative to expectations). Prior to seasonal adjustment, payroll fell by nearly 3 million (similar to last year).

The unemployment rate edged up to 4.8%, as labor force participation increased (don’t read too much into that). Average hourly earnings rose 0.1%, up just 2.7% y/y – however, there may have been some issues in finance (which was reported down 1.0% m/m).

Personal income and spending showed relatively good momentum in December, but unit auto sales fell sharply in January. Hence, the growth of consumer spending (69% of GDP) appears likely to be at a more moderate pace in 1Q17. New orders and shipments of capital goods were strong through December, suggesting that business fixed investment will make a positive contribution to 1Q17 GDP growth. 

Next week, the economic calendar is thin. We already had an initial look at December trade in the report on Advance Economic Indicators (strong exports of capital goods, further increases in imports). Import prices are never a market-mover, but the report may suggest a fading impact of a strong dollar. The following week will be more eventful (with Yellen’s semi-annual monetary policy testimony to Congress).


  Last Last Week YTD return %
DJIA 19884.91 20100.91 0.62%
NASDAQ 5636.20 5655.18 4.70%
S&P 500 2280.85 2296.68 1.88%
MSCI EAFE 1736.42 1739.53 3.11%
Russell 2000 1360.54 1375.60 0.02%


Consumer Money Rates

  Last 1 year ago
Prime Rate 3.75 3.50
Fed Funds 0.67 0.38
30-year mortgage 4.23 3.72



  Last 1 year ago
Dollars per British Pound 1.253 1.460
Dollars per Euro 1.076 1.105
Japanese Yen per Dollar 112.80 117.90
Canadian Dollars per Dollar 1.303 1.378
Mexican Peso per Dollar 20.560 18.170



  Last 1 year ago
Crude Oil 53.54 32.23
Gold 1219.40 1141.30


Bond Rates

  Last 1 month ago
2-year treasury 1.19 1.16
10-year treasury 2.46 2.35
10-year municipal (TEY) 3.56 3.52


Economic Calendar

February 7  —  Trade Balance (December)
February 9  —  Trade Balance (December)
February 10  —  Consumer Price Index (January)
   —  UM Consumer Sentiment (mid-February)
February 15  —  Consumer Price Index (January)
   —  Retail Sales (January)
   —  Industrial Production (January)
   —  Yellen Monetary Policy Testimony
February 20  —  Presidents Day (markets closed)
March 10  —  Employment Report (February)
March 15  —  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 February 2nd, 2017.

©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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