The Weekly Market Snapshot from Frazier Allen for the week of May 13th, 2012

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

Europe, again. Election results in France and Greece were not a surprise, but they added to concerns about the European crisis. The important aspect, for U.S. investors, is the uncertainty. Nobody knows exactly what will happen in Europe, but few doubt that the situation will be resolved anytime soon.

The second bailout agreement for Greece was only a few months ago, but at the time many felt that Greece would never be able to live up to the requirements.

Elsewhere in Europe, there has been some backsliding on austerity. Tighter budgets have weakened the troubled economies in Europe and have done nothing to resolve financial difficulties. Austerity is needed in the long term, but what’s needed in the short term is economic growth.

The economic calendar was thin. The trade deficit widened more than most analysts expected, but figures were only slightly wider than what was assumed in the advance GDP report.

Jobless claims appear to have settled down (at nearly the same pace as in March) after seasonal adjustment quirks lifted the figures in the first three weeks of April. Consumer sentiment improved in the mid-May assessment.

Next week, Europe is expected to be an ongoing concern for U.S. investors, but the arrival of mid-month economic data will provide a distraction. The focus is likely to be on the retail sales and residential construction reports. April’s retail sales are likely to have been moderate. April building permits and housing starts are expected to reflect an unwinding of the multi-family noise from March (single-family construction appears to have turned the corner, but a full recovery in housing is years away). The FOMC policy meeting minutes could include some market-moving quotes.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 5/11/2012

S&P Sector Performance (YTD) – 5/11/2012

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 April 26th, 2012.

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