Economics Team

September 17, 2009

• US consumers have decreased Debt • Consumer Sentiment has increased • Initial unemployment has decreased

26,000• There are some projections that treasury

might actually make money off the TARP program

This Week’s Call

• Market:– Up sharply for the week – Best sectors: oil and gas – Utilities have been declining – Basic Materials (Non Ferrous Metals) and Technology

(mainly computer hardware and semiconductors) have been doing well

– Finance has been catching up in the market– Health Care has been lagging – Industrials and Consumer Goods and services are generally

around the S&P (Some a little higher)

This Week’s Call

• Economic News:– Retail Sales: Increased From July by 2.7%– PPI: +1.7% seasonally adjusted – CPI : increased by .4%– Capacity Utilization: 69.6% (expected to be 69.0%)– Housing and employment numbers come out on Thursday– Exports have picked up 1%– Business investment has picked up 1%– GDP has increased – Opinion: the economy is better in the past 2 quarters, though

personal consumption lags it wont lag that much

This Week’s Call

• The rally happened to the extreme that it did since the stock prices were so low in the first place

• Continue in Recovery – Average of all early revivals have been 20 months – We are 6 months in therefore there will be at least another

year in early revival – Negative inflation is about a year away

• The No Trade War between the US and China will not spin out of control it is more of a political move – The countries are too dependent upon each other

This Week’s Call

5/25/1979 11/14/1984 5/7/1990 10/28/1995 4/19/2001 10/10/2006 4/1/2012

-0.04000

-0.02000

0.00000

0.02000

0.04000

0.06000

0.08000

0.10000

0.12000

0.14000

0.16000

Adjusted GDP – Percent Change

5/25/1979 11/14/1984 5/7/1990 10/28/1995 4/19/2001 10/10/2006 4/1/2012

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

Initial Unemployment Hours – Percent Change

5/25/1979 11/14/1984 5/7/1990 10/28/1995 4/19/2001 10/10/2006 4/1/2012

-0.020

-0.015

-0.010

-0.005

0.000

0.005

0.010

0.015

0.020

CPI – Percent Change

5/25/1979 11/14/1984 5/7/1990 10/28/1995 4/19/2001 10/10/2006 4/1/2012

-0.06000

-0.04000

-0.02000

0.00000

0.02000

0.04000

0.06000

0.08000

Weekly Hours Worked – Percent Change

5/25/1979 11/14/1984 5/7/1990 10/28/1995 4/19/2001 10/10/2006 4/1/2012

-0.4000

-0.2000

0.0000

0.2000

0.4000

0.6000

0.8000

Housing Starts – Percent Change

EnergyEnergy Equipment & Servuces Oil, Gas & Consumable Fuels

Materials Chemicals Construction Materials Containers & Packaging Metals & Mining Paper & Forest Products

Capital Goods Aero Space & Defense Building Products Construction & Engineering Electrical Equipment Industrial ConglomeraMachineryTrading Companies & Distributors

Commercial& Professional Services Commercial Services&Supplies Professional Services

TransportationAir Freight &LogisticsAirlinesMarine Road&RailTransportation Infrastructure

Automobiles & ComponentsAuto Components Automobiles

Consumer Durables & Apparel Household Durables Leisure Equipment & Products Textiles, Apparel & Luxury Goods

Consumer Services Hotels Restuarants & Leisure Diversified Consumer Services

Media Media

Retailing DistributorsInternet & Catalog Retail Multiline Retail Specialty Retail

Food& Staples Retailing Food& Staples Retailing

Food Beverage & TobaccoBeverages Food Products Tobacco

Household & Personal ProductsHousehold Products Personal Products

Industry Cut Down: Health Care Equipment & Service

Health Care Equipment & Supplies Health Care Providers & Services Health Care Technology

Pharma. Biotech & Life Sciences BiotechnologyPharmaceuticalsLife Sciences Tools & Services

BanksCommercial Banks Thrifts& Mortgage Finance

Diversified Financials Diversified Financial ServicesConsumer Finance Capital Markets

Insurance Insurance

Real EstateReal Estate Investment Trusts Real Estate Management & Development

Software &ServicesInternet Software & Services IT ServicesSoftware

Technology Hardware & Equipment Communications Equipment Computers & PeripheralsElectronic Equip.,Instr. & CompoOffice Electronics

Semiconductors& Semi Equipment Semiconductors& Semi Equipment

Telecommunication Services Diversified Telecommunication Services Wireless Telecommunication Services

Utilities Electric Utilities Gas Utilities Multi-Utlilities Water-Utilities Independent Power Producers & Energy Traders

Eliminated