The Weekly Market Snapshot from Frazier Allen for the week of January 8th, 2012

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

The economic data were generally better. The ISM manufacturing and non-manufacturing indices each picked up in December, although levels remained consistent with only moderate economic growth. The December Employment report was moderately strong. Nonfarm payrolls rose by 200,000 (vs. a median forecast of +150,000), but was likely boosted by the seasonal adjustment (unadjusted payrolls fell by 219,000). The two previous months were revised a net 12,000 lower. Private-sector payrolls rose by 212,000. State and local government continued to shed jobs (-14,000), but the pace of decline has been moderating as tax revenues improve.

The unemployment rate fell to 8.5%, from a revised 8.7% in November and 9.4% a year ago. The broader unemployment rate (U-6), which includes discouraged workers and part-time workers who would rather half full-time employment, fell to 15.2%, vs. 15.6% in November and 16.6% a year ago. The employment-population ratio held steady at 58.5%, vs. 58.3% a year ago.

The minutes of the December 13 FOMC meeting indicated that officials will begin publishing forecasts of the federal funds target rate for the next few years and provide a narrative describing the key factors underlying those assessments as well as qualitative information on expectations about the Fed’s balance sheet. “A number of members indicated that current and prospective economic conditions could well warrant additional policy accommodation, but they believed that any additional actions would be more effective if accompanied by enhanced communication about the Committee’s longer-run economic goals and policy framework.”

Equity investors began the year with some degree of optimism. However, concern about Europe continued to weigh against market sentiment.

Next week, the economic calendar thins out. The retail sales report should be the highlight. Sales are expected to have risen moderately in December (not weak, but not especially strong either). With a thinner economic calendar, Europe may be more of a concern for U.S. investors. European Central Bank officials will meet on Thursday and they are widely expected to lower short-term interest rates for a third consecutive month.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 1/6/2012

S&P Sector Performance (YTD) – 1/6/2012

Economic Calendar

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.

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) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.

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 December 5th, 2011.

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