Weekly Market Recap | May 20

The Week in Review

Retail sales increased 0.1% in Apr. Industrial production fell -0.5% in Apr. Jobless claims increased to 360K Housing starts fell to 853K in Apr. Housing permits increased to 1,017K in Apr. - Preliminary consumer sentiment increased to 83.7

Weekly Data Center

Equities S&P 500 Dow Jones 30 Russell 2000 Russell 1000 Growth Russell 1000 Value MSCI EAFE MSCI EM NASDAQ Fixed Income U.S. Aggregate U.S. Corporates Municipals (10yr) High Yield Key Rates 2-yr U.S. Treasuries 10-yr U.S. Treasuries 30-yr U.S. Treasuries 10-yr German Bund 3-mo. LIBOR 3-mo. EURIBOR 6-mo. CD rate 30-yr fixed mortgage Prime Rate Level 1634 15118 2424 496.85 510.73 1759 1051 3437 Yield 1.87 2.72 1.99 6.03 5/10/13 0.26 1.90 3.10 1.38 0.28 0.21 N/A 3.59 3.25 1 week 1.29 1.01 2.19 1.38 1.38 0.73 0.88 1.79 1 week -0.40 -0.52 -0.58 0.24 5/3/13 0.22 1.78 2.96 1.24 0.28 0.20 0.26 3.59 3.25 QTD 4.36 3.94 2.58 4.85 3.63 5.94 2.01 5.34 QTD 0.34 0.95 0.80 2.66 3/29/13 0.25 1.87 3.10 1.28 0.28 0.21 0.27 3.76 3.25

Index Returns (%) YTD 15.43 16.44 15.29 14.86 16.39 11.48 0.41 14.32 YTD 0.22 0.84 1.15 5.63 Levels (%) 12/31/12 0.25 1.78 2.95 1.31 0.31 0.19 0.31 3.52 3.25 1 year 23.07 20.73 24.98 19.47 27.30 25.98 10.41 18.83 1 year 2.77 6.71 3.95 14.38 5/10/12 0.27 1.89 3.07 1.53 0.47 0.70 0.45 4.01 3.25 3-yr. Cum. 50.30 51.82 47.30 53.40 48.58 33.04 17.99 49.71 3-yr. Cum. 16.41 25.99 21.54 40.77 5/10/10 0.87 3.57 4.41 2.90 0.42 0.69 0.53 4.96 3.25 NTM P/E 14.27 13.21 19.65 16.59 13.07 13.55 10.67 17.65 Currencies $ per $ per per $ Commodities Oil (WTI) Gasoline Natural Gas Gold Silver Copper Corn DJ/UBS Idx

Index Characteristics P/B 2.28 2.78 1.77 4.34 1.59 1.51 1.62 2.77 5/10/13 1.30 1.54 101.78 5/10/13 96.04 3.54 3.91 1427 23.37 7391 6.49 265.57 Div. Yld. Mkt. Cap (bn) 2.12 105.63 2.31 N/A 1.40 1.61 1.75 95.43 2.37 92.94 3.14 48.18 2.77 38.78 1.27 5294 Levels 12/31/12 1.32 1.63 86.47 Levels 12/31/12 91.82 3.30 3.40 1658 29.95 7915 7.11 279.84 5/10/12 1.30 1.62 79.95 5/10/12 97.08 3.79 2.34 1599 29.25 8196 5.87 273.51

The Week Ahead Existing home sales FOMC minutes - Jobless claims - Markit Flash PMI - FHFA home prices - New home sales - Durable goods

Thought of the Week

With the S&P 500 at historic highs, many investors are beginning to question the sustainability of this bull market. However, while the year is far from over and future volatility is almost certain, it is important to remain cognizant of what has been driving markets. As the chart of the week depicts, despite strong stock market performance since the depths of the recession, earnings growth has been responsible for the majority of returns until the fourth quarter of last year. While earnings growth is sure to slow in the quarters ahead and valuation metrics hover at historic averages, this does not necessarily call for the end of the bull market just yet. Just as a pendulum does not stop mid-swing, a boost in consumer confidence due to improving household wealth coupled with a slowly healing labor market could carry multiples higher.
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Chart of the Week

Sources of year-over-year price performance in the S&P 500
Broken into multiple expansion and earnings growth

Style Returns

S&P 500 Sector Returns

16.9

YTD

1 week

Weekly Market Recap | May 20

Chart of the Week: Source: Standard and Poor's, Main Street Financial. Thought of the week: Source: Standard and Poor's, Main Street Financial. Equity Price Levels and Returns: All returns represent total return for stated period. Index: S&P 500; provided by: Standard & Poors. Index: Dow Jones Industrial 30 (The Dow Jones is a price-weighted index composing of 30 widely-traded blue chip stocks.) ; provided by: S&P Dow Jones Indices LLC. Index: Russell 2000; provided by: Russell Investments. Index: Russell 1000 Growth; provided by: Russell Investments. Index: Russell 1000 Value; provided by: Russell Investments. Index: MSCI EAFE; provided by: MSCI gross official pricing. Index: MSCI EM; provided by: MSCI gross official pricing. Index: Nasdaq Composite; provided by: NASDAQ OMX Group. MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia, and the Far East. Bond Returns: All returns represent total return. Index: Barclays US Aggregate; provided by: Barclays Capital. Index: Barclays Investment Grade Credit; provided by: Barclays Capital. Index: Barclays Municipal Bond 10 Yr; provided by: Barclays Capital. Index: Barclays Capital High Yield Index; provided by: Barclays Capital. Key Interest Rates: 2 Year Treasury, FactSet; 10 Year Treasury, FactSet; 30 Year Treasury, FactSet; 10 Year German Bund, FactSet. 3 Month LIBOR, British Bankers Association; 3 Month EURIBOR, European Banking Federation; 6 Month CD, Federal Reserve; 30 Year Mortgage, Mortgage Bankers Association (MBA); Prime Rate: Federal Reserve. Commodities: Gold, FactSet; Crude Oil (WTI), FactSet; Gasoline, FactSet; Natural Gas, FactSet; Silver, FactSet; Copper, FactSet; Corn, FactSet. Dow Jones UBS Commodity Index, S&P Dow Jones Indicies LLC. Currency: Dollar per Pound, FactSet; Dollar per Euro, FactSet; Yen per Dollar, FactSet. S&P Index Characteristics: Dividend yield provided by FactSet Pricing database. Fwd. P/E is a bottom-up weighted harmonic average using First Call Mean estimates for the "Next 12 Months" (NTM) period. Market cap is a bottomup weighted average based on share information from Compustat and price information from FactSet's Pricing database as provided by Standard & Poor's. MSCI Index Characteristics: Dividend yield provided by FactSet Pricing database. Fwd. P/E is a bottom-up weighted harmonic average for the "Next 12 Months" (NTM) period. Market cap is a bottom- up weighted average based on share information from MSCI and Price information from FactSet's Pricing database as provided by MSCI. Russell 1000 Value Index, Russell 1000 Growth Index, and Russell 2000 Index Characteristics: Trailing P/E is provided directly by Russell. Fwd. P/E is a bottom-up weighted harmonic average using First Call Mean estimates for the "Next 12 Months" (NTM) period. Market cap is a bottom-up weighted average based on share information from Compustat and price information from FactSet's Pricing database as provided by Russell. Sector Returns: Sectors are based on the GICS methodology. Return data are calculated by FactSet using constituents and weights as provided by Standard & Poors. Returns are cumulative total return for stated period, including reinvestment of dividends. Style Returns: Style box returns based on Russell Indexes with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for stated period including the reinvestment of dividends. The Index used from L to R, top to bottom are: Russell 1000 Value Index (Measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values), S&P 500

Weekly Market Recap

May 20, 2013

Index (Index represents the 500 Large Cap portion of the stock market, and is comprised of 500 stocks as selected by the S&P Index Committee), Russell 1000 Growth Index (Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values), Russell Mid Cap Value Index (Measures the performance of those Russell Mid Cap companies with lower price-to-book ratios and lower forecasted growth values), Russell Mid Cap Index (The Russell Midcap Index includes the smallest 800 securities in the Russell 1000), Russell Mid Cap Growth Index (Measures the performance of those Russell Mid Cap companies with higher price-to-book ratios and higher forecasted growth values), Russell 2000 Value Index (Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values), Russell 2000 Index (The Russell 2000 includes the smallest 2000 securities in the Russell 3000), Russell 2000 Growth Index (Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values).

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Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of equity securities may rise, or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to play, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

Main Street Financial., May 2013. Unless otherwise stated, all data is as of May 17, 2013 or as of most recently available.

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