Clarksville Weekly Market Snapshot from Frazier Allen for the week of December 3rd, 2013
December 3, 2013
Clarksville, TN – Next week, the ISM Manufacturing Index should set the tone for the week, but the markets will put a lot of weight on the November jobs data.
Recall that the government shutdown did not have a noticeable impact on the October nonfarm payroll figures (which were stronger than anticipated), but did alter the household survey data (the unemployment rate and the employment/population ratio).
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 24th, 2013
November 24, 2013
Clarksville, TN – The minutes of the October 29th-30th Federal Open Market Committee meeting showed that monetary policymakers still expected the economy to improve in line with their earlier projections “and would thus warrant trimming the pace of purchases in coming months.”
Officials also considered scenarios where the Fed could taper “before an unambiguous further improvement in the outlook was apparent.” The stock market pulled back a bit on the taper talk, but rose to new highs anyway.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 17th, 2013
November 17, 2013
Clarksville, TN – In her nomination hearing before the Senate Banking Committee, Janet Yellen took a balanced approach in discussing how she would conduct monetary policy, but the markets took that as “dovish.”
She gave no hint that the pace of asset purchases would be tapered anytime soon, but she also cautioned that the program could not last indefinitely. She noted that the economy is far from fully recovered and indicated that “we have farther to go” in the labor market.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 12th, 2013
November 12, 2013
Clarksville, TN – The economic data surprised. Real GDP rose at a stronger-than-expected 2.8% annual rate in the advance estimate for 3Q13, but the figure was boosted by faster growth in inventories (which added 0.8 percentage point to GDP growth).
Consumer spending rose at a 1.5% annual rate, while business fixed investment rose 1.6% – nothing to write home about. The partial government shutdown had a mixed impact on the October employment figures.
Nonfarm payrolls rose by 204,000 (median forecast: +125,000), while August and September figures were revised a net +60,000.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 3rd, 2013
November 3, 2013
Clarksville, TN – As expected, the Federal Open Market Committee did not alter the pace of asset purchases (currently $85 billion per month). The FOMC noted that “the recovery in the housing sector slowed somewhat in recent months,” but removed the phrase (from the September 18th statement that “the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market.”
That suggests that the Fed could still begin to taper the pace of asset purchases at the December policy meeting if the economic data between now and then are strong enough (although that’s not seen as likely).
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 28th, 2013
October 28, 2013
Clarksville, TN – The September Employment Report (delayed from October 6) was disappointing relative to expectations (although hardly “weak”). Nonfarm payrolls rose by 148,000 (median forecast: +180,000). The two previous months were revised a net 9,000 higher.
Note that seasonal adjustment is often tricky in September (due to the start of the school year). The unemployment rate edged down to 7.2%, while the labor force participation rate held steady. The employment/population rate held steady, but was down slightly from a year earlier.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 22nd, 2013
October 22, 2013
Clarksville, TN – As was widely anticipated, lawmakers reached an 11th-hour agreement on the budget and debt ceiling. The “Continuing Appropriations Act, 2014” funds the government through January 15th, suspends the debt ceiling to February 7th, and requests bipartisan House/Senate budget negotiations by December 13th.
Thus, while the deal dodges a near-term financial catastrophe, it does not remove uncertainty entirely. Lawmakers will have less than three months to agree on a new spending authorization.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 13th, 2013
October 13, 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.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 8th, 2013
October 8, 2013
Clarksville, TN – Due to a lapse in appropriations, the government entered a partial shutdown. Some 800,000 federal workers were furloughed and about two million others continued to work but without getting paid. The economic impact of the shutdown will depend on how long it lasts.
A few days would not be a big deal, but a prolonged shutdown would result in a larger disruption of worker income (and corresponding restraint in consumer spending). In addition, the uncertainty may lead businesses to delay new hiring or capital expenditures. During the 1995-96 government shutdown, about 20% of private contracts with the government were affected.
Frazier Allen
Stocks up despite U.S. Government Budget Impasse
October 2, 2013
Clarksville, TN – The third quarter of the year proved quite eventful.
The Federal Reserve opted to wait a little longer before beginning to dial back its bond purchases, and a budgetary showdown in D.C. resulted in a partial government shutdown on the same day the private healthcare exchanges mandated by the 2010 Affordable Care Act (ACA) opened.
Political tensions arose over whether to defund or delay major provisions of the ACA.
Frazier Allen
