Weekly Market Snapshot

MARKET COMMENTARY
BY SCOTT J. BROWN, PH.D., CHIEF ECONOMIST

Fed Chair Janet Yellen said she was “cautiously optimistic” in her speech on the economy and monetary policy. She expects that further gradual increases in the federal funds target rate will be warranted, but she also stressed a number of near-term uncertainties.

This week, the mid-month economic data releases will be important, especially Tuesday’s retail sales figures, but the focus will be on the Fed. The Federal Open Market Committee (FOMC) will release its policy statement at 2 p.m. on Wednesday. No change in rates is expected, and the FOMC should be noncommittal about a possible move in July. At the same time, the Fed will release the revised Summary of Economic Projections, which will include a new dot plot (the forecasts by each senior official of the federal funds target rate). One half hour later, Yellen will conduct her post-meeting press conference.

INDICES

Last Last Week YTD return %
DJIA 17985.19 17720.50 3.21%
NASDAQ 4958.62 4737.34 -0.97%
S&P 500 2115.48 2064.11 3.50%
MSCI EAFE 1675.32 1645.55 -2.39%
Russell 2000 1181.20 1108.60 3.99%

CONSUMER MONEY MARKET

Last 1 year ago
Prime Rate 3.50 3.25
Fed Funds 0.38 0.13
30-year mortgage 3.59 4.04

CURRENCIES

Last 1 year ago
Dollars per British Pound 1.441 1.442
Dollars per Euro 1.131 1.131
Japanese Yen per Dollar 106.90 106.77
Canadian Dollars per Dollar 1.275 1.274
Mexican Peso per Dollar 18.381 18.387

COMMODITIES

Last 1 year ago
Crude Oil 49.84 50.11
Gold 1272.40 1272.70
BOND RATES
Last 1 month ago
2-year treasury 0.76 0.75
10-year treasury 1.66 1.73
10-year municipal (TEY) 2.37 2.38

TREASURY YIELD CURVE – 06/10/2016

As of close of business 06/09/2016

ECONOMIC CALENDAR

June 10  — UM Consumer Sentiment (mid-June)
June 14  — Retail Sales (May)
June 15  — FOMC Policy Decision (Yellen press conference)

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. 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. Also municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. 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) assumes a 35% tax rate. Municipal securities may lose their tax-exempt status if certain legal requirements are not met, or if tax laws change.

Material prepared by Raymond James for use by its financial advisors.
Data source: Bloomberg, as of close of business June 9, 2016.

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