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Market Commentary by Scott J. Brown, Ph.D., Chief Economist<\/span><\/em><\/strong><\/p>\n Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services<\/p><\/div>\n Leaders in Washington reached an agreement to raise the debt ceiling, averting a self-inflicted financial disaster. However, with the debt ceiling nonsense out of the way, investors were free to focus on the U.S. economic recovery and Europe\u2019s debt crisis \u2013 and the outlook doesn\u2019t look so hot. The U.S. economy has slowed and the downside risks to the growth outlook have increased. Although it still appears that the U.S. is likely to avoid a recession, the odds have increased. The European debt crisis appears to be enveloping Spain and Italy, which will be much bigger problems for the big banks in Europe. Stocks fell broadly around the world.<\/p>\n The July Employment report was consistent with the broad range of economic data releases of the last few weeks, suggesting a subpar economic recovery, but not a recession. Nonfarm payrolls rose by 117,000 \u2013 well above the +85,000 consensus forecast and, more importantly, not as bad as feared. The unemployment rate edged down to 9.1%, but would have risen if not for people exiting the labor force. After digesting the report, the stock market gave up gains made in an initial (positive) reaction to the report. Bonds yields fell. The dollar was mixed following efforts by the Swiss and the Japanese to weaken their currencies.<\/p>\n Next week, the economic calendar thins out. The focus is likely to be on the Fed policy meeting. The Fed could announce a few small steps to support growth. Another round of asset purchases (what most people would call “QE3” is likely to be discussed, but it\u2019s too soon to expect the Fed to pull the trigger on such a move \u2013 that would depend on a renewed threat of deflation, and we\u2019re not there yet. Retail sales should have improved in July, but the pace is likely to be unimpressive.<\/p>\n![\"Scott](\"http:\/\/www.clarksvilleonline.com\/wp-content\/uploads\/2010\/05\/scottjbrown-159x200.jpg\" "\\"Scott")
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<\/a>Material prepared by Raymond James for use by its financial advisors.<\/p>\n