The market snapshot from October 16, 2009, indicates that stock market gains were driven by earnings reports despite cautious outlooks, while retail sales declined, reflecting the waning effects of the 'cash for clunkers' program. Economic data suggests a moderate recovery, with expectations of improved residential construction and a sixth consecutive monthly gain in leading economic indicators. Fed officials acknowledged positive economic data but noted ongoing lending tightness, with a mixed outlook for future economic conditions.

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Weekly Market Snapshot
October 16, 2009
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Market Commentary
by Scott J. Brown, Ph.D., Chief Economist
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Earnings reports helped fuel stock market gains, although most contained
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relatively cautious outlooks. Retail sales fell in September, reflecting an
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unwinding of the “Cash for Clunkers” impact. However, the decline was less Houston, TX 77057
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advanced 0.5%, following a 0.7% gain in August. The figures are consistent
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with a moderate economic recovery. Inventories fell more than expected in
August, suggesting that a slower pace of inventory reduction may not make
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as strong a contribution to third quarter 2009 gross domestic product (GDP)
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The minutes of the September 22/23 Federal Open Market Committee RAYMOND JAMES
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(FOMC) showed that Fed officials were encouraged by the recent economic
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data. However, bank credit was expected to remain “difficult to obtain and
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costly for many borrowers,” one factor restraining growth into next year.
Some FOMC members felt that an increase in purchases of mortgage-
backed securities (MBS) – beyond what was already slated – would help
reduce the amount of slack in the economy more quickly. One felt that the
improved economic data called for reducing these purchases. However, all
agreed to have the MBS purchase plan tail off into March of next year.
Next week, the economic data will be second tier, unlikely to alter the
economic outlook. Residential construction activity is expected to have
improved further in September. The Fed’s Beige Book should reflect mixed
economic conditions, with some improvement overall, but with continued
tightness in lending conditions. The Index of Leading Economic indicators
will post a sixth consecutive monthly gain.

2. Next week, the economic data will be second tier, unlikely to alter the
economic outlook. Residential construction activity is expected to have
improved further in September. The Fed’s Beige Book should reflect mixed
economic conditions, with some improvement overall, but with continued
tightness in lending conditions. The Index of Leading Economic indicators
will post a sixth consecutive monthly gain.
Indices
Last Last Week YTD return %
DJIA 10062.95 9786.87 14.66%
NASDAQ 2173.29 2123.93 37.81%
S&P 500 1096.56 1065.48 21.40%
MSCI EAFE 1602.32 1567.44 29.49%
Russell 2000 623.34 607.75 24.81%
Consumer Money Rates
Last 1-year ago
Prime Rate 3.25 4.50
Fed Funds 0.14 0.75
30-year mortgage 5.05 6.38
Currencies
Last 1-year ago
Dollars per British Pound 1.625 1.737
Dollars per Euro 1.492 1.353
Japanese Yen per Dollar 90.64 101.48
Canadian Dollars per Dollar 1.033 1.181
Mexican Peso per Dollar 13.09 12.58
Commodities
Last 1-year ago
Crude Oil 77.58 74.54
Gold 1051.64 843.55
Bond Rates

3. Commodities
Last 1-year ago
Crude Oil 77.58 74.54
Gold 1051.64 843.55
Bond Rates
Last 1-month ago
2-year treasury 0.98 0.94
10-year treasury 3.44 3.39
10-year municipal (TEY) 4.97 4.80
Treasury Yield Curve – 10/16/2009
S&P Sector Performance Charts – 10/16/2009

4. Economic Calendar
October 19 — Homebuilder Sentiment (October)
October 20 — Producer Price Index (September)
Residential Construction (September)
October 21 — Fed Beige Book
October 22 — Jobless Claims (week ending October
17)
Leading Economic Indicators
(September)
October 23 — Existing Home Sales (September)
October 27 — S&P/Case Shiller Home Prices (August)
Consumer Confidence (October)
November 3/4 — FOMC Meeting
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. Municipal bond interest is not subject to federal
income tax but may be subject to AMT, state or local taxes. 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

5. income tax but may be subject to AMT, state or local taxes. 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 October 15th, 2009.
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