Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 13th, 2013

Clarksville, TN – The partial government shutdown and brinksmanship over the debt ceiling continued. However, financial market participants were encouraged by signs that the two sides were at least willing to talk to each other.

House Republicans appear to have abandoned demands for a repeal or delay of the Affordable Care Act, but it hasn’t been clear what they want instead. Note that a temporary (six-week or three-month) extension of the debt ceiling does not remove uncertainty completely, but it would sidestep a near-term financial catastrophe.

As expected, President Obama nominated current Fed Vice Chair Janet Yellen to be chairwoman of the Federal Reserve (term to begin February 1st). While focused on improving labor market conditions, Yellen also pledged to keep inflation in check and safeguard the financial system. Yellen should have little trouble being approved by the Senate.

Minutes of the September 17-18 Federal Open Market Committee indicated that “for several members, the various considerations made the decision to maintain an unchanged pace of asset purchases at this meeting a relatively close call.” Some officials argued for an immediate taper, citing cumulative improvement in the labor market since the asset purchase program began. Others argued for a delay, citing “disappointing” economic data and uncertainties regarding negotiations on the budget and debt ceiling, as well as a possible further increase in long-term interest rates if the Fed decided to taper.

Next week, most of the government economic data reports are expected to be delayed due to the shutdown. Investors will watch for signs of progress on the budget and debt ceiling.

Indices

	Last	Last Week	YTD return %
DJIA	15126.07	14996.48	15.43%
NASDAQ	3760.75	3774.34	24.55%
S&P 500	1692.56	1678.66	18.68%
MSCI EAFE	1810.82	1820.63	12.89%
Russell 2000	1069.50	1070.90	25.92%

Consumer Money Rates

	Last	1-year ago
Prime Rate	3.25	3.25
Fed Funds	0.10	0.17
30-year mortgage	4.23	3.39

Currencies

	Last	1-year ago
Dollars per British Pound	1.596	1.600
Dollars per Euro	1.352	1.289
Japanese Yen per Dollar	98.110	78.260
Canadian Dollars per Dollar	1.038	0.980
Mexican Peso per Dollar	13.084	12.949

Commodities

	Last	1-year ago
Crude Oil	103.01	91.25
Gold	1298.24	1761.18

Bond Rates

	Last	1-month ago
2-year treasury	0.34	0.44
10-year treasury	2.65	2.89
10-year municipal (TEY)	4.37	5.03

Treasury Yield Curve – 10/11/2013

S&P Sector Performance (YTD) – 10/11/2013

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Economic Calendar

October 14th	—	Columbus Day (bond market closed)
October 15th	—	Empire State Manufacturing Index (October) Fed Beige Book
October 16th	—	Consumer Price Index (September) Homebuilder Sentiment (October) Fed Beige Book
October 17th	—	Jobless Claims (week ending October 5th) Building Permits, Housing Starts (September) Industrial Production (September) Philadelphia Fed Index (October)
October 18th	—	Leading Economic Indicators (September)
Mid-October	—	Debt Ceiling becomes binding
October 30th	—	Real GDP (3Q13, advance) FOMC Policy Decision, no 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.

^[4]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 October 10th, 2013.

©2013 Raymond James Financial Services, Inc. member FINRA ^[5] / SIPC ^[6].