Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 20th, 2013

Clarksville, TN – Fed tapering concerns continued to weigh against the stock market and helped push long-term interest rate higher. There’s a growing consensus that we will see some reduction in the rate of asset purchases announced next month, but the first move may be a small one, as a compromise among divided Fed officials and as a means of testing market reactions to tapering.

The market reaction to the tapering talk is still a puzzle. Tapering is not tightening and the Fed will continue to support the recovery through its guidance on short-term interest rates. However, long-term interest rates are normally going to rise as an economic recovery progresses.

The economic data have been mixed, but generally consistent with moderate growth. Retail sales rose modestly in July, but were better ex-autos. Industrial production was flat, with a slight drop in manufacturing output.

Inflation figures remained mild. Despite the low trend in inflation, real average weekly earnings declined. Residential construction activity rebounded in July, but only partially following a sharp drop in June.

Weekly claims for unemployment insurance are trending lower (play a part in fanning Fed tapering fears). The euro area saw its first increase in GDP in seven quarters (hardly inspiring).

Next week, the focus is expected to be on the minutes of the July 30th-31st Fed policy meeting (released Wednesday afternoon). Investors will be looking for clues about what the Fed will do at the September policy meeting. The home sales data are unlikely to move the markets significantly. The LEI should post a moderately strong gain for July.

Indices

	Last	Last Week	YTD return %
DJIA	15112.19	15498.32	15.32%
NASDAQ	3606.12	3669.12	19.43%
S&P 500	1661.32	1697.48	16.49%
MSCI EAFE	1756.62	1763.83	9.51%
Russell 2000	1027.61	1049.47	20.99%

Consumer Money Rates

	Last	1-year ago
Prime Rate	3.25	3.25
Fed Funds	0.10	0.15
30-year mortgage	3.62	3.62

Currencies

	Last	1-year ago
Dollars per British Pound	1.558	1.568
Dollars per Euro	1.326	1.228
Japanese Yen per Dollar	97.850	78.950
Canadian Dollars per Dollar	1.033	0.989
Mexican Peso per Dollar	12.829	13.148

Commodities

	Last	1-year ago
Crude Oil	107.33	94.33
Gold	1358.39	1603.75

Bond Rates

	Last	1-month ago
2-year treasury	0.35	0.31
10-year treasury	2.77	2.51
10-year municipal (TEY)	4.65	4.55

Treasury Yield Curve – 08/16/2013

S&P Sector Performance (YTD) – 08/16/2013

Economic Calendar

August 21st	—	Existing Home Sales (July) FOMC Minutes (July 30st-31st)
August 22nd	—	Jobless Claims (week ending August 17th) Leading Economic Indicators (July)
August 23rd	—	New Home Sales (July)
August 26th	—	Durable Goods Orders (July)
August 27th	—	Consumer Confidence (August)
August 29th	—	Real GDP (2Q13, 2nd estimate)
September 2nd	—	Labor Day Holiday (markets closed)
September 6th	—	Employment Report (August)
September 18th	—	FOMC Policy Decision, Bernanke Press Briefing

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 15th, 2013.

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