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Jim: Hi Everyone,

Today is Wednesday, February 24, 2016 and this is our midweek, midday market update conference call to bring you up to date on how we are viewing market conditions, actions and directions. This is Jim Schmidt. I am in Atlanta Georgia today at a branch manager and financial advisor development program, Bernie will not be on today’s call as she will join this meeting later today. These conferences are held periodically by Raymond James to help strengthen our wealth management skills as well as keep us current on tax and wealth planning updates.

I have stepped away from a working lunch to make this call with you and I thank you for calling in today. Today’s comments will be abbreviated and to the point. We still have some bullish indicators that are highlighting assessments for a higher stock market. Even though yesterday’s market action was negative, the New York stock exchange bullish percent edged higher yesterday. This has been an indicator that has kept us invested in stocks, even though at a lower percentage than normal. As you know we made a shift a couple of weeks ago into more cash and fixed income. Where we also began to invest in were some investments that were showing up as places to be. They seem to be early places where investors have historically been in anticipation of recessions, household goods and utilities. This has also been underlined with a falling interest rate environment, something which is out of character for an interest rate world in which the Fed said just a few short months ago was RAISING rates. This will be an interesting battle to watch over the coming months, a Federal Reserve committed to raising rates during a period of time that looks pre-recession.

By the way, in all the recessions I have professionally lived through, they all start out with the news media and economic pundits denying a recession often to a backdrop of classic recession signs: falling interest rates and a strong market interest in utilities and consumer staples, investments that tend to outperform in recessions.

Our stock indicators are pointing higher although we could see a pullback here in the short term. Our interest rate indicators? They are all heading lower. The one interest rate that is moving higher is the 13-week treasury. This makes sense and tends to mirror the Federal Reserve’s desire to raise short term rates, the only area of the interest rate market that they can have a strong influence. The other parts of the treasury market are driven by market forces, and as we have said, they tend to be part of attributes that are calling for a recession.

Again, we will wait and see. We have a good handle on our accounts with larger than normal fixed income and cash positions as we have told you in recent weeks, fixed income, cash and US equities is the order dictated by our indicators. That means that different pockets of each of those asset classes when measured against each other are showing that bonds, then cash then stocks is the line-up for our investments and that is where we are positioned currently.

I’ll stop there and take any questions or comments.

Opinions expressed are not necessarily those of Raymond James & Associates. The author's opinions are subject to change without notice. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.

Diversification and strategic asset allocation do not ensure a profit or protect against a loss.

The Bullish Percent Index (BPI) is a breadth indicator based on the number of stock on Point & Figure buy signals within an index. Developed by Abe Cohen in the mid 1950s, the Bullish Percent Index was originally applied to NYSE stocks, but is also applied to the OTC market, relying on NASDAQ.

The NASDAQ Composite Index is an unmanaged index of all stocks traded on the NASDAQ over-the-counter market. The S&P 500 is an unmanaged index of 500 widely held stocks.

There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices rise. Dividends are not guaranteed and will fluctuate.

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