Clarksville Weekly Market Snapshot from Frazier Allen for the week of December 17th, 2017

Clarksville, TN – As expected, the Fed raised short-term interest rates for the third time in 2017 (market participants were more focused on the progress of tax legislation).

The dots in the dot plot did not shift much from where they were in September and were all over the place for the end of 2018 and 2019 – meaning that there is no clear consensus on the pace of policy action (and bear in mind that personnel changes mean that many of these dots will be replaced in 2018).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 28th, 2017

Clarksville, TN – Next week, the economic calendar picks back up and the Senate returns to work on its version of a tax-cut bill.

However, the focus is expected to be on Jay Powell’s Fed chair nomination hearing. Powell is unlikely to speak about the near-term policy outlook (what the Fed will do in December), but lawmakers will ask about his broader approach to monetary policy and banking regulation (expect vigorous questioning from Senator Warren, but he should eventually receive approval in a full Senate vote).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of August 27th, 2017

Clarksville, TN – Next week, the economic calendar picks up, with the important figures (nonfarm payrolls, ISM manufacturing) arriving as market participants get set for the three-day weekend. Consumer confidence figures will cover the first half of the month and are therefore unlikely to reflect much of an impact from Charlottesville.

Second quarter GDP growth is likely to be revised higher in the 2nd estimate (a 2.6% pace in the advance estimate).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of June 7th, 2017

Clarksville, TN – The May Employment Report was generally disappointing. Nonfarm payrolls rose by 138,000 (median forecast: +185,000), while figures for March and April were revised a net 66,000 lower.

Retail payrolls fell for the fourth consecutive month (down more than 80,000 since January, which is more than the total number of coal miners). The unemployment rate dipped to 4.3%, a 16-year low, partly reflecting a sharp drop in the rate for young adults (which could reflect a seasonal adjustment issue, although the trend is clearly lower).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of February 13th, 2017

Clarksville, TN – The economic data calendar was thin. December trade figures were roughly in line with expectations. The University of Michigan Consumer Sentiment Index fell in the mid-February estimate.

Stock market investors were encouraged by the prospect for tax cuts following comments by U.S. President Donald Trump. In contrast, the bond market, recognizing that the process for cutting taxes will be contentious and lengthy, is less fearful of a large boost to the federal budget deficit (hence, bond yields have backed down over the past month).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of February 8th, 2017

Clarksville, TN – The Federal Open Market Committee left short-term interest rates unchanged, as expected, and tweaked the wording of the policy statement slightly. There were no solid clues as to the timing of the next increase in short-term interest rates, but officials noted the improvement in consumer and business sentiment and seemed a little more confident that inflation “will” increase to the 2% goal.

While January numbers are often suspect due to the magnitude of the seasonal adjustment, the economic data continued to paint a picture of the economy that is in good shape.

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of January 15th, 2017

Clarksville, TN – The economic calendar was relatively thin. Small business optimism rose sharply in December.  Growth in retail sales was concentrated in autos and gasoline – mixed and generally flat otherwise (with unusual softness in food) – but it was still a relatively good quarter overall. 

Department store sales were weak, but that is a long-term trend (not necessarily a sign of consumer weakness). The PPI was largely in line with expectations, reflecting moderate pipeline inflationary pressures (consistent with further Fed rate hikes in the months ahead).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of December 11th, 2016

Clarksville, TN – Italy voted “no” on its constitutional referendum and Prime Minister Renzi resigned. South Korea’s president was impeached. The European Central Bank extended its asset purchase program to the end of 2017, but will reduce the monthly pace of purchases in April.

None of that disturbed U.S. equity market investors who continued to enjoy the Trump sizzle. After showing some signs of stability, bond yields again moved higher.

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of December 6th, 2016

Clarksville, TN – There was a ton of economic data, most of it consistent with moderately strong growth in the near term. Nonfarm payrolls rose in line with expectations in November.

The unemployment rate fell to 4.6% (the lowest since August 2007), but that was partly due to a drop in labor force participation. Average hourly earnings fell 0.1%, following a 0.4% rise in October, up 2.5% y/y (still trending higher, but more moderately than it appeared a month ago).

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Clarksville Weekly Market Snapshot from Frazier Allen for the week of November 28th, 2016

Clarksville, TN – Next week, fresh economic figures will arrive, but none of the reports, including the November employment report, are expected to sway the Fed away from raising short-term interest rates on December 14th.

Job growth is expected to have been moderately strong in November, but keep a close eye on average hourly earnings, which have suggested the wage pressures are building (note that the average hourly earnings figures can be quirky – they are often revised the next month – but the trend is higher).

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