Clarksville Weekly Market Snapshot from Frazier Allen for the week of February 8th, 2015

Clarksville, TN – The January Employment Report was strong. Nonfarm payrolls rose by 257,000 (median forecast: +235,000), with a net upward revision of +147,000 to the two previous months (three month average at +336,000). Payrolls fell by 2.76 million before seasonal adjustment, but were up 3.21 million from a year earlier.

The unemployment rate edged up to 5.7% (from 5.6%) reflecting noise in the labor force participation figure (down in December, up in January). The employment/population ratio edged higher. Average hourly earnings jumped 0.5%, following a 0.2% decline in December (up 2.2% y/y, still a relatively lackluster trend).

Personal income and spending figures were mixed in December (quarterly spending figures were strong). The PCE Price Index fell 0.2% (+0.7% y/y), flat excluding food & energy (+1.3% y/y, vs. the Fed’s official goal of 2.0%). The trade deficit was wider than expected in December, implying (all else equal) a slight downward revision to the estimate of 4Q14 GDP.

The soap opera in Europe continued. Greece’s new prime minister and finance minister toured the various capitals pleading for less austerity, but were met with a hardline stance. The ECB symbolically tightened the screws, shutting off a lending channel that the Greek banks don’t use much (or even need). Something’s got to give at some point, but this could drag on for a while (with headlines possibly having some impact on U.S. financial markets).

Next week, the economic calendar thins out. January isn’t an important month for most retailers, but investors will be watching the figures closely after December’s disappointing data (watch for revisions). A thin economic calendar means that investors may focus attention elsewhere (for example, on developments abroad).

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.

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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 February 5th, 2015.

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