The Weekly Market Snapshot from Frazier Allen for the week of June 17th, 2012

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

Retail sales fell 0.2% in May, matching the consensus forecast, but not quite as expected, as auto dealership sales rose 0.8% instead of falling (as the unit sales reported by the automakers did, seasonally adjusted). Ex-autos, sales fell 0.4%, pushed down partly by lower gasoline prices. Sales of building materials fell 1.7%, following a 2.3% drop in April – yet, sales of building materials for the first five months of the year were up 11.1% vs. the same period in 2011. That’s not weak.

Overall retail sales were up 7.0% y/y for the first five months of the year. Hence, this appears to be a weather story – the same story we saw in nonfarm payrolls (stronger in January and February at the expense of slower numbers in March, April, and May. Note that the folks at the Fed are smart enough to figure this out.

The PPI fell 1.0% in May, a larger drop than expected, with the core rate at 0.2%, matching expectations. The core index for intermediate goods fell 0.2% and the core index for crude materials fell 1.3% (following a 1.8% drop in April). Pipeline inflationary pressures are now negative, but not enough (we believe) for the Fed to undertake more accommodation.

Indices

	Last	Last Week	YTD return %
DJIA	12651.91	12460.96	3.56%
NASDAQ	2836.33	2831.02	8.87%
S&P 500	1329.10	1314.99	5.69%
MSCI EAFE	1360.75	1361.94	-3.67%
Russell 2000	762.34	760.34	2.89%

Consumer Money Rates

	Last	1-year ago
Prime Rate	3.25	3.25
Fed Funds	0.20	0.12
30-year mortgage	3.67	4.51

Currencies

	Last	1-year ago
Dollars per British Pound	1.553	1.639
Dollars per Euro	1.260	1.447
Japanese Yen per Dollar	79.310	80.520
Canadian Dollars per Dollar	1.025	0.968
Mexican Peso per Dollar	13.988	11.798

Commodities

	Last	1-year ago
Crude Oil	83.91	99.37
Gold	1620.03	1520.48

Bond Rates

	Last	1-month ago
2-year treasury	0.28	0.26
10-year treasury	1.59	1.85
10-year municipal (TEY)	3.18	2.97

Treasury Yield Curve – 6/15/2012

S&P Sector Performance (YTD) – 6/15/2012

Economic Calendar

June 17th	—	Greece Votes
June 20th	—	FOMC Policy Decision Bernanke Press Briefing
July 4th	—	Independence Day (markets closed)
July 6th	—	Employment Report (June)

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 June 14th, 2012.

©2012 Raymond James Financial Services, Inc. member FINRA / SIPC.