The Weekly Market Snapshot from Frazier Allen for the week of May 27th, 2012
Market Commentary by Scott J. Brown, Ph.D., Chief Economist
The news out of Europe remained bleak. G-8 leaders committed “to take all necessary steps” to strengthen and reinvigorate their economies, but recognized that “the right measures are not the same for each of us.” A few days later, European Union leaders could not agree on a course of action. Manufacturing sentiment surveys were weak in China and the eurozone (including France and Germany).
How much bad news (about Europe) is factored in? Apparently a lot. The markets reacted only briefly and modestly to Europe’s bad news, although there was plenty of intraday volatility along the way.
The U.S. economic calendar was relatively thin, with improvement in both new and existing home sales, but disappointing figures on durable goods orders. Consumer sentiment improved (for the ninth consecutive month) to its highest level since October 2007, largely due to more favorable job and wage prospects.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Dollars per British Pound||1.587||1.618|
|Dollars per Euro||1.255||1.409|
|Japanese Yen per Dollar||79.490||82.070|
|Canadian Dollars per Dollar||1.028||0.978|
|Mexican Peso per Dollar||14.062||11.703|
|10-year municipal (TEY)||3.06||3.14|
Treasury Yield Curve – 5/25/2012
S&P Sector Performance (YTD) – 5/25/2012
|Memorial Day Holiday (markets closed)|
|S&P/Case-Shiller Home Price Index (March)
Consumer Confidence (May)
|ADP Payroll Estimate (May)
Pending Home Sales Index (April)
|Jobless Claims (week ending May 26th)
Real GDP (1Q12, 2nd estimate)
Chicago PM Index (May)
|Employment Report (May)
Personal Income and Spending (April)
Markit US PMI (May)
|FOMC Policy Decision
Bernanke Press Briefing
[320left]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.
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 May 25th, 2012.