Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 27th, 2014

Clarksville, TN – Market participants had expected Fed Chair Janet Yellen to adopt a decidedly “dovish” tone in her Jackson Hole speech.

However, Yellen presented a balanced assessment of the evidence and theories of labor market slack. While Yellen still sees plenty of labor market slack currently, she left the monetary policy outlook as an open question.

She repeated the notion (also included in the FOMC minutes) that the Fed could firm monetary policy sooner if the economy strengthens more than anticipated, but could also tighten more slowly if the economy disappoints.

The economic data reports were generally strong. Residential construction figures were a lot stronger than anticipated, reflecting the usual volatility in the multi-family sector and the large uncertainty in how the housing start figures are calculated.

Single-family permits, the key figure in the report, rose 0.9%, with mixed results across regions. The Consumer Price Index rose a little less than expected in July. Existing home sales rose a little more than expected.

Next week, the march of economic data releases continues. New home sales and durable goods orders are notoriously volatile from month to month, with some potential to surprise. The estimate of 2Q14 GDP growth is likely to be revised a bit higher.

July personal income and spending figures will help fill in the GDP picture for 3Q14, although many investors are likely to check out early ahead of the three-day weekend.

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 21st, 2014.

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