Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 4th, 2013

Clarksville, TN – The Federal Open Market Committee left short-term interest rates unchanged, as expected, and did not alter its forward guidance (on short-term interest rates) or the monthly pace of asset purchases.

In the policy statement, the FOMC noted that growth had been “modest” in the first half of the year, that mortgage rates had risen “somewhat,” and that a persistent low trend in inflation could present some risks for the economy. All of which suggests that a tapering in the rate of asset purchases will be delayed. However, investors should still expect some tapering by the end of the year.

The economic data were mostly on the strong side of expectations, but nonfarm payrolls rose less than the stock market was hoping for. Payrolls rose by 162,000, while the two previous months were revised a net 26,000 lower. The Unemployment rate fell to 7.4% (from 7.6%), but that was due to a drop in labor force participation and a sharp drop in the rate for young adults (which suggests seasonal adjustment issues).

Real GDP growth rose at a 1.7% annual rate in the advance estimate for 2Q13 (that figure will be revised, and revised again), but the estimate of 1Q13 GDP growth was revised lower (to +1.1%, from +1.8%). Comprehensive revisions to the GDP figures did not alter the pattern of growth over the last few years by much (other than the downward revision to 1Q13), although personal income figures were revised higher.

The ISM Manufacturing Index was much stronger than expected, but it’s only one month and the comments of supply managers were relatively cautious.

Next week, the economic calendar cools down considerably.

Indices

	Last	Last Week	YTD return %
DJIA	15628.02	15555.61	19.26%
NASDAQ	3675.74	3605.19	21.73%
S&P 500	1706.87	1690.25	19.68%
MSCI EAFE	1741.75	1744.10	8.59%
Russell 2000	1059.88	1054.18	24.79%

Consumer Money Rates

	Last	1-year ago
Prime Rate	3.25	3.25
Fed Funds	0.10	0.15
30-year mortgage	4.39	3.55

Currencies

	Last	1-year ago
Dollars per British Pound	1.513	1.561
Dollars per Euro	1.321	1.230
Japanese Yen per Dollar	99.360	78.210
Canadian Dollars per Dollar	1.035	1.001
Mexican Peso per Dollar	12.839	13.261

Commodities

	Last	1-year ago
Crude Oil	107.89	88.91
Gold	1312.12	1603.25

Bond Rates

	Last	1-month ago
2-year treasury	0.30	0.39
10-year treasury	2.61	2.70
10-year municipal (TEY)	4.60	4.46

Treasury Yield Curve – 08/02/2013

S&P Sector Performance (YTD) – 08/02/2013

Economic Calendar

August 5th	—	ISM Non-Manufacturing Index (July)
August 6th	—	Trade Balance (June)
August 8th	—	Jobless Claims (week ending August 3rd)
August 13th	—	Retail Sales (July)
August 15th	—	Consumer Price Index (July) Industrial Production (July)
August 16th	—	Building Permits, Housing Starts (July)
August 21st	—	FOMC Minutes (July 30th-31st)
August 29th	—	Real GDP (2Q13, 2nd estimate)

Important Disclosures

[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.

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 August 1st, 2013.

©2013 Raymond James Financial Services, Inc. member FINRA / SIPC.