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Weekly Market Snapshot

March 24, 2017

Market Commentary
by Scott J. Brown, Ph.D., Chief Economist

The market focus was on Washington, where the repeal/replacement of the Affordable Care Act failed to garner enough support to pass in the House. Note that there are important tax issues embedded in the ACA. Hence, the repeal has been seen as a necessary step in overall tax reform. On Wednesday, the stock market slumped as the replacement bill ran into trouble, but conditions stabilized on Thursday. 

The economic data were inconsequential. Home sales figures were mixed, but one shouldn’t put much weight on February data (which are subject to weather effects and seasonal adjustment noise). Durable goods orders were largely in line with expectations, reflecting moderate strength in capital goods shipments. 

Next week, the third estimate of fourth quarter GDP growth arrives on Thursday, but investors will be more concerned about growth in the quarters ahead. The Advance Economic Indicators and personal spending data will help to fill in the growth picture for the first quarter. Events out of Washington may be a factor, as investors attempt to gauge the prospects for tax cuts, etc.


Indices

  Last Last Week YTD return %
DJIA 20689.65 20934.55 4.69%
NASDAQ 5849.76 5900.76 8.67%
S&P 500 2353.03 2381.38 5.10%
MSCI EAFE 1793.00 1796.80 6.47%
Russell 2000 1360.19 1386.03 0.23%

Consumer Money Rates

  Last 1 year ago
Prime Rate 4.00 3.50
Fed Funds 0.91 0.38
30-year mortgage 4.20 3.71

Currencies

  Last 1 year ago
Dollars per British Pound 1.252 1.415
Dollars per Euro 1.078 1.117
Japanese Yen per Dollar 110.91 112.90
Canadian Dollars per Dollar 1.335 1.325
Mexican Peso per Dollar 18.929 17.610

Commodities

  Last 1 year ago
Crude Oil 47.70 39.46
Gold 1250.20 1223.50

Bond Rates

  Last 1 month ago
2-year treasury 1.26 1.16
10-year treasury 2.42 2.34
10-year municipal (TEY) 3.55 3.62

Treasury Yield Curve – 03/24/2017


As of close of business 03/23/2017


S&P Sector Performance (YTD) – 03/24/2017



As of close of business 03/23/2017


Economic Calendar

March 28  —  Advance Economic Indicators (February)
 —  CB Consumer Confidence (March)
March 29  —  Pending Home Sales Index (February)
March 30  —  Jobless Claims (week ending March 25)
 —  Real GDP (4Q16, 3rd estimate)
March 31  —  Personal Income and Spending (February)
 —  Chicago Purchasing Managers Index (March)
 —  UM Consumer Sentiment Index (March)
April 3  —  ISM Manufacturing Index (March)
 —  Motor Vehicle Sales (March)
April 5  —  ADP Payroll Estimate (March)
 —  ISM Non-Manufacturing Index (March)
 —  FOMC Minutes (March 14-15)
April 7  —  Employment Report (March)
April 14  —  Good Friday Holiday (market closed)
 —  Consumer Price Index (March)
 —  Retail Sales (March)
May 3  —  FOMC Policy Decision (no press conference)
June 14  —  FOMC Policy Decision (Yellen press conference)

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and 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. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor's returns. U.S. 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. U.S. 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 U.S. 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. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business March 23, 2017.

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