Clarksville Weekly Market Snapshot from Frazier Allen for the week of December 6th, 2015
December 6, 2015
Clarksville, TN – Fed Chair Janet Yellen did not commit to raising rates in December, but she continued to lay the groundwork for an initial hike. She noted that with interest rates close to zero, the consequence of raising rates too soon or too late is not symmetric, which suggests that the Fed should be cautious as it prepares to tighten monetary policy.
However, she also noted that monetary policy affects the economy with a lag, and waiting too long raises risks for the economy and for financial stability.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of December 2nd, 2015
December 2, 2015
Clarksville, TN – Next week, the economic calendar has plenty of fresh figures. The ISM surveys and Friday’s employment report would normally be the highlights (and those reports will be important), but financial market participants will be more interested in what happens Thursday.
The European Central Bank’s Governing Council is expected to expand its asset purchase program, while Fed Chair Janet Yellen with testify before the Joint Economic Committee of Congress. Yellen is likely to provide a clearer signal that the Fed will begin raising short-term interest rates at the December policy meeting.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 15th, 2015
November 15, 2015
Clarksville, TN – The economic data calendar was relatively thin, leaving stock market investors to fret about a likely December rate hike from the Fed. A 25-basis-point increase in short-term interest rates should not have much of an impact on the economy, especially if the Fed follows up very gradually (as anticipated).
However, the financial markets see the initial tightening move as a big deal, so it is. Weak earnings results haven’t helped, but most of the weakness is tied to the strong dollar and slower growth abroad.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 8th, 2015
November 8, 2015
Clarksville, TN – The October employment report was much stronger than anticipated. However, figures should be considered in their proper context. Nonfarm payrolls rose by 271,000, with a net upward revision to the two previous months of +12,000.
Due to the start of the school year, seasonal adjustment can be tricky in October (we added 1.152 million jobs before seasonal adjustment, versus 1.081 million in October 2014).
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 1st, 2015
November 1, 2015
Clarksville, TN – The Federal Open Market Committee left short-term interest rates unchanged, but the tone of the policy statement was unexpectedly hawkish. The FOMC removed the phrase about downside risks from the global economy, but said that it would monitor global economic and financial developments.
It also specifically talked about the decision framework for “the next meeting,” clearly putting a December 16th rate hike back in play.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 28th, 2015
October 28, 2015
Clarksville, TN – The economic calendar was light. Residential construction figures were mixed, largely reflecting the usual noise in the multi-family sector data (single-family starts and permits were little changed and still up strongly from a year ago). Existing home sales rebounded from a surprise drop in August. The four-week average for jobless claims fell to the lowest level since 1973.
Earnings reports were mixed, but investors appeared to be encouraged by the view that economic growth will continue, but not so fast that the Federal Reserve rushes to take away the punch bowl.
Frazier Allen
Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 4th, 2015
October 4, 2015
Clarksville, TN – The economic data were mixed, but consistent with the theme of global softness and domestic strength. Unit auto sales improved further in September – and, combined with the August data on personal income and spending, suggest that inflation-adjusted consumer spending (70% of GDP) is on track to have expanded at an annual pace of 3.5% to 4.0% in 3Q15.
The trade deficit in goods widened sharply in August, with that split evenly between stronger imports (despite lower oil prices) and weaker exports. Net exports and an inventory correction are expected to subtract significantly from 3Q15 GDP growth, but underlying domestic demand appears to have remained strong.
Frazier Allen
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
