Clarksville, TN – The economic data were consistent with a slowing in the rate of overall growth in July.
The estimate of second quarter growth was revised higher (to a 2.5% annual rate, vs. +1.7% in the advance estimate), but that was almost entirely due to a smaller-than-expected trade deficit (the estimate of consumer spending growth was the same and the estimate of business fixed investment was only slightly different).
Personal income and spending figures showed a poor start for the consumer in 3Q13. Durable goods orders tanked in July, reflecting a drop in aircraft orders (which were strong in May and June). However, ex-transportation orders still disappointed.
The conflict in Syria was a major concern for the markets. U.S. military action is expected to be limited (that is, “surgical” airstrikes, no boots on the ground), but there is concern that we may see a broadening of strife in the region. The conflict led to a pop in crude oil prices and a fleeting flight to safety in Treasuries.Next week, the focus will be on the August Employment Report. Fed policymakers are not going to react to any one data release, but the jobs report is expected to play a major role in the Fed’s decision to begin reducing the rate of asset purchases (and by how much). The markets could react to any surprise in some of the other data releases before Friday.
However, market participants will also watch developments in the crisis with Syria. Congress won’t return until the second week of September, which gives lawmakers a short window to address the budget and the debt ceiling.
Indices
Last | Last Week | YTD return % | |
DJIA | 14840.95 | 14963.74 | 13.25% |
NASDAQ | 3620.30 | 3638.71 | 19.90% |
S&P 500 | 1638.17 | 1656.96 | 14.86% |
MSCI EAFE | 1711.89 | 1735.38 | 6.73% |
Russell 2000 | 1026.94 | 1036.20 | 20.91% |
Consumer Money Rates
Last | 1-year ago | |
Prime Rate | 3.25 | 3.25 |
Fed Funds | 0.08 | 0.15 |
30-year mortgage | 4.51 | 3.59 |
Currencies
Last | 1-year ago | |
Dollars per British Pound | 1.550 | 1.583 |
Dollars per Euro | 1.324 | 1.253 |
Japanese Yen per Dollar | 98.360 | 78.750 |
Canadian Dollars per Dollar | 1.053 | 0.988 |
Mexican Peso per Dollar | 13.296 | 13.279 |
Commodities
Last | 1-year ago | |
Crude Oil | 108.80 | 95.49 |
Gold | 1411.86 | 1659.08 |
Bond Rates
Last | 1-month ago | |
2-year treasury | 0.39 | 0.30 |
10-year treasury | 2.76 | 2.61 |
10-year municipal (TEY) | 4.92 | 4.60 |
Treasury Yield Curve – 08/30/2013
S&P Sector Performance (YTD) – 08/30/2013
Economic Calendar
September 2nd |
— |
Labor Day Holiday (markets closed) |
September 3rd |
— |
ISM Manufacturing Index (August) |
September 4th |
— |
Trade Balance (July) Fed Beige Book Motor Vehicle Sales (August) |
September 5th |
— |
Employment Report (August) |
September 6th |
— |
ADP Payroll Estimate Jobless Claims (week ending August 31st) ISM Non-Manufacturing Index (August) |
September 13th |
— |
Retail Sales (August) |
September 18th |
— |
FOMC Policy Decision, Bernanke Press Briefing |
Important Disclosures
US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the US government.
Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments.
Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
Material prepared by Raymond James for use by its financial advisors.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business August 29th, 2013.
©2013 Raymond James Financial Services, Inc. member FINRA / SIPC.