Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 28th, 2013

Clarksville, TN – The September Employment Report (delayed from October 6) was disappointing relative to expectations (although hardly “weak”). Nonfarm payrolls rose by 148,000 (median forecast: +180,000). The two previous months were revised a net 9,000 higher.

Note that seasonal adjustment is often tricky in September (due to the start of the school year). The unemployment rate edged down to 7.2%, while the labor force participation rate held steady. The employment/population rate held steady, but was down slightly from a year earlier.

The financial markets interpreted the payroll data as suggesting decreased odds that the Fed will begin to taper the rate of asset purchases in December. Between now and the December Fed policy meeting, the economic data reports are going to be distorted due to the government shutdown.

The markets see the distorted data and continued uncertainty in Washington as likely to keep the Fed from tapering this year. However, the Fed should be able to read through much of the noise and it’s very unlikely that we’ll see another government shutdown (lawmakers may not be able to agree to a grand bargain on the deficit, but they can at least agree to punt the ball down the field).

Next week, delayed government economic reports will arrive. The retail sales figures are likely to get the most weight and have some potential to surprise. The Fed policy meeting is expected to be a non-event – that is, no change in the pace of asset purchases.

There is no press briefing after the meeting. Investors will look to the wording of the policy statement for any changes that would suggest what the Fed might do in December. On Friday, the ISM manufacturing data will provide an important read on the factor sector.

Indices

	Last	Last Week	YTD return %
DJIA	15509.21	15371.65	18.35%
NASDAQ	3928.96	3863.15	30.12%
S&P 500	1752.07	1733.15	22.85%
MSCI EAFE	1896.55	1863.81	18.24%
Russell 2000	1118.85	1102.27	31.73%

Consumer Money Rates

	Last	1-year ago
Prime Rate	3.25	3.25
Fed Funds	0.09	0.17
30-year mortgage	4.13	3.41

Currencies

	Last	1-year ago
Dollars per British Pound	1.620	1.602
Dollars per Euro	1.380	1.295
Japanese Yen per Dollar	97.360	79.810
Canadian Dollars per Dollar	1.042	0.994
Mexican Peso per Dollar	12.959	12.988

Commodities

	Last	1-year ago
Crude Oil	96.71	85.33
Gold	1350.31	1702.98

Bond Rates

	Last	1-month ago
2-year treasury	0.30	0.33
10-year treasury	2.50	2.63
10-year municipal (TEY)	4.37	4.52

Treasury Yield Curve – 10/25/2013

S&P Sector Performance (YTD) – 10/25/2013

October 28th	—	Industrial Production (September) Pending Home Sales Index (September)
October 29th	—	Producer Price Index (September) Retail Sales (September) Consumer Confidence (October)
October 30th	—	ADP Payroll Estimate (October) Consumer Price Index (September) FOMC Policy Decision, no press briefing
October 31st	—	Jobless Claims (week ending October 26th) Chicago Purchasing Managers Index (October)
November 1st	—	ISM Manufacturing Index (October) Motor Vehicle Sales (October)
November 7th	—	Real GDP (3Q13, advance estimate)
November 8th	—	Employment Report (October)

Important Disclosures

Past performance is not a guarantee of future results. There are special risks involved with global investing related to market and currency fluctuations, economic and political instability, and different financial accounting standards. The above material has been obtained from sources considered reliable, but we do not guarantee that it is accurate or complete. There is no assurance that any trends mentioned will continue in the future. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Investing involves risk and investors may incur a profit or a loss.

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 October 24th, 2013.

©2013 Raymond James Financial Services, Inc. member FINRA / SIPC.