Weekly Market Recap May 6, 2013

The Week in Review

Unemployment rate fell to 7.5%. Consumer confidence bounced back. Trade balance narrowed. ISM and Markit mfg. surveys decreased. Light vehicle sales fell.

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 1614 14974 2372 490.45 504.26 1750 1042 3379 Yield 1.80 2.67 1.87 6.06 5/3/13 0.22 1.78 2.96 1.24 0.28 0.20 N/A 3.60 3.25 1 week 2.06 1.82 2.07 2.58 1.48 1.34 2.08 3.07 1 week -0.29 -0.43 0.15 1.00 4/26/13 0.22 1.70 2.87 1.20 0.28 0.21 0.26 3.60 3.25 QTD 3.03 2.90 0.38 3.42 2.22 5.17 1.12 3.49 QTD 0.74 1.48 1.38 2.41 3/29/13 0.25 1.87 3.10 1.28 0.28 0.21 0.27 3.76 3.25

Index Returns (%) YTD 13.95 15.27 12.82 13.29 14.80 10.68 -0.46 12.31 YTD 0.62 1.37 1.74 5.37 Levels (%) 12/31/12 0.25 1.78 2.95 1.31 0.31 0.19 0.31 3.52 3.25 1 year 18.66 16.40 20.07 14.60 23.27 20.72 4.83 13.26 1 year 3.32 7.35 5.12 14.11 5/3/12 0.28 1.96 3.12 1.61 0.47 0.71 0.46 4.05 3.25 3-yr. Cum. 43.20 45.42 35.66 46.16 40.71 26.45 12.28 39.83 3-yr. Cum. 17.37 26.36 22.35 37.70 5/3/10 1.00 3.72 4.53 3.00 0.35 0.67 0.46 5.02 3.25 NTM P/E 14.13 13.10 19.14 16.42 12.92 13.31 4.68 17.34 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 1.52 1.62 2.77 5/3/13 1.31 1.56 98.94 5/3/13 95.61 3.52 3.96 1469 24.25 7122 6.69 267.93 Div. Yld. Mkt. Cap (bn) 2.14 105.34 2.32 N/A 1.38 1.56 1.74 95.45 2.35 92.48 3.14 48.06 2.77 38.36 1.31 5203 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 5/3/12 1.32 1.62 80.38 5/3/12 102.54 3.83 2.29 1638 30.36 8318 6.15 278.28

The Week Ahead

- Consumer Credit - Jobless Claims - Wholesale Trade

Thought of the Week

The unemployment rate fell to 7.5% in April, down 2.5% from its peak in October 2009. This decline in the unemployment rate has occurred despite slow job growth and reflects a sharp fall in labor force participation (the share of the adult population that is either working or actively looking for a job). Some commentators allege that this decline in participation is due to so-called "discouraged workers" people who give up on searching for a job because they feel there are no jobs out there for them. However, this week's chart shows that the number of people who identify themselves as discouraged workers has actually fallen significantly since 2010. In truth, most of the decline in labor force participation has been due to demographics, not economies, and is likely to continue to some extent even as the economy improves. If this is so, while it limits the long-term growth potential of the economy, it also suggests that the unemployment rate may fall toward the 6.5% threshold that the Fed has suggested as a rate-hike trigger, faster than the Fed itself expects - one more reason for investors to position their portfolios for a rise in interest rates.
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Chart of the Week

Number of Discouraged Workers Has Been Decreasing
Thousands, non-seasonally adjusted
1,400 1,200 1,000 800 600

Style Returns

200 0 '03 '05 '07 '09 '11 '13

YTD

400

1 week

Weekly Market Recap

Chart of the Week: Source: BLS, FactSet, Main Street Financial. Thought of the week: Source: BLS, FactSet, Main Street Financial Management 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

May 6, 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).

Contact Main Street Financial Management at 1-312-635-0711 for further information. You can also visit us at www.mainstreetfm.com.

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 Management, May 2013. Unless otherwise stated, all data is as of May 3, 2013 or as of most recently available.

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