Clarksville Weekly Market Snapshot from Frazier Allen for the week of September 27th, 2015
September 27, 2015
Clarksville, TN – In Janet Yellen’s first public speech after the recent FOMC meeting, the Fed chair downplayed concerns about the rest of the world and placed herself among the majority of Fed officials expecting to raise short-term interest rates by the end of the year. In a scary moment for investors, Yellen struggled to finish her speech.
She repeatedly lost her place, paused for long periods, and looked generally unwell. She received medical treatment. A Fed spokesperson said that she was dehydrated and that she felt fine later. While stock market participants have been worried about Fed tightening, they seemed to have been more encouraged by Yellen’s expressed confidence in the U.S. economy.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of September 20th, 2015
September 20, 2015
Clarksville, TN – The Federal Open Market Committee delayed the start of policy normalization, citing concerns about global economic and financial developments.
The FOMC is not reacting to overseas developments per se, but rather to the implications for the U.S. economy (some restraint on growth, further downward pressure on inflation). In the revised dot plot, there was little agreement about where the federal funds rate would be at the end of 2016 and 2017.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of September 15th, 2015
September 15, 2015
Clarksville, TN – The economic calendar was thin, leaving investors free to worry about slower global growth and Federal Reserve policy. The stock market was volatile, but not as much as in recent weeks.
The Bank of Canada and the Bank of England each left short-term interest rates unchanged. The BOC lowered rates in January and July, but showed no bias to cut rates further in the next few months. The BOE has been debating whether to start raising rates, but appears to have put such notions aside in the near term, reflecting concerns about the global economy.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of September 6th, 2015
September 6, 2015
Clarksville, TN – The economic data were mixed, but generally consistent with moderately strong growth. Unit auto sales improved in August. The ISM Manufacturing Index slowed. The Non-Manufacturing Index pulled back a bit after surging in July (still strong). The Fed’s Beige Book described growth as evenly split between “modest” and “moderate” across the 12 Fed districts.
The August employment report was mixed, but generally strong. Nonfarm payrolls rose by 173,000 (median forecast: +220,000), but with a net revision of +44,000 to June and July.
Frazier Allen
Frazier Allen: Equity markets stumble in August on global worries
September 2, 2015
Clarksville, TN – The equity markets, and subsequently investors, experienced some wild swings toward the end of August, spurred in part by China’s faltering economy and a drop in oil prices. On paper, global equities have lost trillions in value after China unexpectedly devalued its currency earlier this month.
The move triggered concern that one of the world’s largest economies, especially its manufacturing sector, is growing at a slower rate. Consumer confidence also declined in August as the stock market turbulence dulled Americans’ outlook for the economy.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 30th, 2015
August 30, 2015
Clarksville, TN – A sharp drop in China’s stock market rattled investors’ nerves around the world. The Dow Jones Industrial Average fell by more than 1,000 points at the open on Monday, regrouped, and then fell again, leaving the benchmark index down 588.
Volatility continued throughout the week, but investors were encouraged by China’s efforts to shore up its stock market and support economic growth. Oil prices fell further, but picked up by the end of the week. The market volatility has left investors struggling to figure out where share prices should be. Volatility is expected to decrease in coming days, but may continue for a while.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 16th, 2015
August 16, 2015
Clarksville, TN – China’s leadership wants the yuan to become an important reserve currency, but that means that the country would have to let the currency float freely and be set by market forces. The People’s Bank of China, the country’s central bank, decided to alter its exchange rate regime.
The currency is allowed to trade in a 2% band around a level announced before the markets open. The PBOC said that this base level would simply be set at the previous session’s close (rather than taken out of the air).
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 9th, 2015
August 9, 2015
Clarksville, TN – The economic data were mixed, but generally consistent with moderately strong growth. The ISM surveys went in opposite directions – the manufacturing index was softer than anticipated, while the non-manufacturing index exceeded expectations. Unit auto sales rebounded. The July Employment Report was about as expected.
Nonfarm payrolls rose by 215,000, with a net upward revision to May and June of +14,000. That put the three-month average at 235,000 (a 2.82 million annual rate). The unemployment rate held steady at 5.3%.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 2nd, 2015
August 2, 2015
Clarksville, TN – The week began with an 8.5% drop in the Shanghai Composite Index, which sent markets down worldwide (but the Chinese market appeared to stabilize later). The Fed made only slight alterations to the wording of the monetary policy statement, and did not provide a strong signal that a September move is coming.
Real GDP rose at a 2.3% annual rate in the advance estimate for 2Q15, a bit shy of expectations, but the first quarter was revised to +0.6% (from -0.2%). Annual benchmark revisions showed a somewhat slower rate of growth in the past few years (mostly in 2013), which implies that the output gap (the difference between GDP and potential GDP) is higher than it was thought to be earlier (an important consideration for the Fed).
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of July 29th, 2015
July 29, 2015
Clarksville, TN – This week the economic calendar is busy. The focus is likely to be on the GDP report (note that financial market participants typically over-emphasize the headline figure – the devil is in the details).
Durable goods orders are expected to have been boosted by a pickup in aircraft orders in June, but the trend in non-transportation orders has been weak in recent months. The Conference Board’s Consumer Confidence Index rose sharply in June – so it wouldn’t be unusual to see a modest pullback in July.
Frazier Allen
