Clarksville Weekly Market Snapshot from Frazier Allen for the week of October 20th, 2015

Clarksville, TN – The economic data were consistent with a lackluster to moderate pace of growth in the near term. Retail sales disappointed, reflecting strength in autos and lower gasoline prices (but a modest trend otherwise). Industrial production was a little soft.

The Producer Price Index showed downward pipeline pressures, and the Consumer Price Index was mixed (reflecting lower energy prices, but some pressure in shelter costs). Excluding food and energy, the CPI rose 0.2% (+1.9%), but if you also exclude shelter, core inflation would have been 0.1% (+1.0% y/y).

In public speeches, two Fed governors suggested that it would be more appropriate for policymakers to delay the initial increase in short-term rates, and the week’s economic data seemed to support that sentiment. The market now sees the Fed waiting until March.

Treasury Secretary Jack Lew sent a letter to Congressional leaders advising them that the drop dead date for raising the debt ceiling will be November 3rd, two days earlier than previously projected.

Next week, the economic calendar thins out somewhat. China will report its third quarter GDP number on Sunday evening (Monday morning in Beijing). The country hit its 7% growth target in both 1Q15 and 2Q15, but does anybody believe these numbers? Investors will be looking for whether the Chinese government recognizes the slowdown (or lowers the growth target).

U.S. housing figures are often uneven from month to month, but we should see strength in homebuilding and sales. Earnings reports are expected to drive the stock market, and the bond market is likely to react to the stock market action. Congress will be back in session, hopefully working on an agreement to raise the debt ceiling.

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.

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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 15th, 2015.

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