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In This Issue.

* Weekly jobs report improves

* Net Worth on the rise

* Limited data next week

* Scottish voters have spoken

And Now. Today's A Pfennig For Your Thoughts.

Scotland Stays...

Good Day! And welcome to Friday morning. As Chris mentioned yesterday, I'll be taking you into the weekend and then Chuck will be back at it on Monday morning, so there you have it. This will probably end up being a little shorter than usual, more about that in the wrap up, but we've had plenty of news headlines and data to inspect over the past few days to keep us busy. Also, I have the pleasure of revealing the big announcement that Chuck previously mentioned, but you'll have to wait until the end to see it. I'm sure the suspense is already getting to you, so let's get this party started.

Yesterday's market action was wedged between Wednesday's Fed meeting and today's poll results in Scotland, but we did have some domestic economic data to pick through. First, we saw an improvement in the weekly jobs number as initial jobless claims fell to a two month low of 280k and the four week moving average, which tends to be less volatile, fell to 299,500. Continuing claims also saw improvement as the number fell to the lowest level since May 2007 as those receiving ongoing benefits fell to 2.43 million.

In other news, the August housing starts and building permits both disappointed as construction fell 14.4% and the forward looking permits fell 5.6%. This report seems to be contradictory to homebuilder confidence gauges that have been on the rise. The dynamic has been shifting toward more multi-family projects, so moderation in this segment last month account for a big part of the disappointment. We also had the Philly Fed index, which measures manufacturing in the area, come in lower at 22.5 but still remains well into positive territory.

Lastly, we had household wealth in the US increase by $1.39 trillion in the second quarter to $81.5 trillion according to a report from the Fed. This increase came as no surprise since the equity markets were setting a new record on a daily basis. I saw some economists questioning whether or not the hot stock market is truly fueling the economy. If we use retail sales as a barometer, I guess you could say the effect isn't nearly as profound. Anyway, the only bit of data this morning in the US is the leading indicators from August, which are still expected to be positive but slower than the previous month.

Next week is actually pretty sparse in the data department that will be dominated by the August home sales reports. At this point, the experts are calling for a slight improvement in both the existing and new home sales. We'll see August durable goods, which the headline figure is expected to fall well short of July but the ex-transportation number is set to rise a little bit so a mixed bag of sorts. Other than that, we get the final revision to second quarter GDP, which the current projections have it rising to 4.5% from 4.2%, and then a handful of secondary data.

The currencies actually turned in a decent scorecard yesterday with the Norwegian krone putting up a over a 2% gain. Chris already talked about the basis for the move higher and the Swedish krona ended up with over a 1% gain. One of the reasons whey the NOK has been stuck in the mud was the looming potential for a rate cut, but it seems policy makers have officially taken that scenario off the table so I wonder if the markets will shift toward pricing in a future rate hike.

The rand remained as the worst performing currency by dropping nearly 0.5% after the central bank kept rates on hold at 5.75% and said that economic growth had deteriorated while inflation most likely peaked in the second quarter. The currency took another hit after central bank governor Gill Marcus said that she will step down form her post when the five year term ends in November. We could see continued volatility as the markets speculate who might take over.

The pound was actually one of the better performing currencies yesterday as traders were pricing in a vote by Scotland to remain within the United Kingdom as the currency hit a two week high. The markets were actually a little more pragmatic than I would have thought since the new world trading patterns like to take the extreme scenario and run with it. Instead, we saw an overall anxious anticipation that lasted through this morning.

In the end, we didn't have any surprises in store for us this morning as just over 55% of Scottish voters opted against pulling out of the UK. As soon as I turned the currency screens on and saw the relative calm, I know the outcome. Prime Minister David Cameron had promised to give more policy making powers to Scotland in the event of a no vote and he pledged a change that would take into account how England and Wales are governed. Once the votes were tallied, he said these commitments would be honored in full.

As Chuck has mentioned several times in the past, uncertainty isn't looked upon too kindly in the currency market so the anxious pressures have been relieved for the time being at least. A vote for independence would have made for some difficult logistics as I'm sure negotiations over North Sea Oil would not be an easy task and not to mention the question as to what currency Scotland would use. As it pertains to the UK, many think economic growth would have taken a hit and then uncertainty as to whether other nations would attempt a similar feat would have increased significantly. But, we don't have to worry about that right now and the markets will shift focus back to the BOE and the prospects of higher interest rates.

Speaking of prospects, it's with great excitement that we announce the launch of EverBank's new 3-year MarketSafe BRICS CD. If you believe that good things are on the horizon for the major emerging economies of Brazil, Russia, India, China and South Africa (aka the BRICS nations), this could be the opportunity you've been waiting for. With our all new MarketSafe BRICS CD, we've united the currency indices of these five nations into one bold financial opportunity.

The MarketSafe BRICS CD brings together the currency indices of those five nations into one US dollar-denominated CD and seeks unlimited upside potential via a semi-annual pricing structure. As with all MarketSafe CDs, the principal is protected so you would get back all of your deposited principal if the currency indices lose value to the US dollar. While we can't make any guarantees as to the future economic strength of the countries, there are factors that suggest the creation of a stronger foundation for growth. This CD doesn't pay a periodic rate of interest or annual percentage yield, but the full terms and conditions are here: www.everbank.com/brics. Open and fund your CD by October 15th to secure your spot in this innovative financial opportunity.

For What it's Worth. Chris threw me a link to an interesting article before he jumped on a plane yesterday morning which he found on The Hill. You can read the entire story at http://thehill.com/blogs/floor-action/house/218047-house-passes-bill-to-audit-the-federal-reserve, but here is a snippet that I wanted to share. "The House on Wednesday passed legislation to audit the Federal Reserve System. Passed 333-92, the bill would require the comptroller general to conduct an audit of the Federal Reserve's board of governors and banks within one year and submit a report to Congress on the findings. A total of 106 Democrats joined all but one Republican in support of the measure."

To recap. Yesterday's data consisted of a better weekly jobs report as new claims fell to 280k and continuing claims fell to the lowest since May 2007. Housing starts and building permits in August both fell more than expected while household net worth for US citizens increased in the second quarter. Next week is shaping up to be fairly quiet as data will be limited. The currencies had a decent day even with the results of the Scottish vote still up in the air. As I came in this morning, Scottish voters decided to stick with the UK so the rest of the day looks to be calm.

Currencies today 9/19/14. American Style: A$ .8972, kiwi .8144, C$ .9123, euro 1.2856, sterling 1.6370, Swiss $1.0653. European Style: rand 11.0260, krone 6.3424, SEK 7.1286, forint 241.45, zloty 3.2538, koruna 21.455, RUB 38.4860, yen 108.82, sing 1.2667, HKD 7.7507, INR 60.7950, China 6.1455, pesos 13.2072, BRL 2.3656, Dollar Index 84.604, Oil $92.78, 10-year 2.61%, Silver $18.40, Platinum $1,342.82, Palladium $822.85, and Gold. $1,222.85

That's it for today. Well, I'm so glad the weekend is here. I just moved into a new house on Wednesday so my life is both literally and figuratively in boxes right now which means time is at a premium for me at this point. I didn't realize just how much stuff I had until I saw it all in boxes and trying to find a new place for it all. Instead of a nice relaxing weekend, it's going to be an unpacking marathon but I hope to get it all knocked out so we can get back to the normal routine. It was a busy day on the desk yesterday and I would have to think it's going to be even busier today since our newest MarketSafe CD is up and running. With that said, I need to hit the send button and get my day started so until next time, Have a Great Day!

Mike Meyer
Assistant Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837





Posted 09-19-2014 1:07 PM by Chuck Butler
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