The following story was published on Thomson ONE:
February 21, 2014
Market Commentary by Scott J. Brown, Ph.D., Chief Economist Poor weather continued to have an impact on the economic data. Residential construction and existing home sales fell more than anticipated in January. However, financial market participants seemed to be more willing to dismiss bad economic numbers (as being due to the weather) – U.S. markets also ignored turmoil in the Ukraine. The CPI rose modestly in January, continuing a low trend. The new and improved Producer Price Report suggested relatively modest pipeline inflation pressures. The January 28-29 FOMC minutes showed “a clear presumption” of a steady pace of tapering of Fed asset purchases (-$10 billion per month at each FOMC meeting), but officials noted that the pace could be altered if there were a “substantial” deviation from the economy’s expected path. Officials agreed that the Fed’s forward guidance (on short-term interest rates) would have to be changed as the unemployment rate neared 6.5%, but there was no agreement about the form that such forward guidance would take. “A few” Fed officials thought it might be appropriate to raise the federal funds target rate “relatively soon.” However, this was clearly a minority view, met with strong opposition from other Fed officials. Next week, the economic data reports will remain subject to weather distortions. Fed Chair Janet Yellen will repeat her monetary policy testimony to the Senate Banking Committee. Given the passage of time (this hearing was postponed two weeks due to the weather), something new may come up in the Q&A, but the Senate generally gives the Fed chair an easier time than the House. The estimate of 4Q13 GDP growth is expected to be revised lower (to about 2.6%, from 3.2% in the advance estimate).
Indices Last
Last Week
YTD return %
DJIA
16133.23
16027.59
-2.68%
NASDAQ
4267.55
4240.672
2.18%
S&P 500
1839.78
1829.83
-0.46%
MSCI EAFE
1908.55
1889.48
-0.37%
Russell 2000
1162.12
1147.79
-0.13%
Consumer Money Rates
Prime Rate
Last
1-year ago
3.25
3.25
Fed Funds
0.07
0.17
30-year mortgage
4.33
3.56
Currencies
Dollars per British Pound
Last
1-year ago
1.665
1.529
Dollars per Euro
1.370
1.334
Japanese Yen per Dollar
102.360
93.630
Canadian Dollars per Dollar
1.111
1.017
Mexican Peso per Dollar
13.283
12.677
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The following story was published on Thomson ONE:
Commodities Last
1-year ago
Crude Oil
102.92
94.46
Gold
1315.67
1580.00
Bond Rates
2-year treasury
Last
1-month ago
0.32
0.34
10-year treasury
2.75
2.74
10-year municipal (TEY)
4.46
4.48
Treasury Yield Curve – 02/21/2014
S&P Sector Performance (YTD) – 02/21/2014
Economic Calendar February 25
—
Case-Shiller Home Prices (December) Consumer Confidence (February)
February 26
—
New Home Sales (January)
February 27
—
Jobless Claims (week ending February 22)
February 28
—
Real GDP (4Q13, 2nd estimate)
Durable Goods Orders (January)
Chicago Purchasing Managers Index (February)
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The following story was published on Thomson ONE:
Consumer Sentiment (February)
©2014 Raymond James & Associates, Inc. member New York Stock Exchange / SIPC.
Yellen Monetary Policy Testimony (Senate Banking Committee) Pending Home Sales (January) March 3
—
ISM Manufacturing Index
March 7
—
Employment Report (February)
March 19
—
FOMC Policy Decision, Yellen Press Briefing
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. 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. Also municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. 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) assumes a 35% tax rate. Municipal securities may lose their tax-exempt status if certain legal requirements are not met, or if tax laws change. Material prepared by Raymond James for use by its financial advisors. Data source: Bloomberg, as of close of business February 13, 2014.
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