WEEKLY REPORT

Markets Research
SPOTLIGHT
United States Unemployment Rate

Jun 3rd Jun 7st

ECB keeps interest rates unchanged

ECB kept its main refinancing rate at a record low of 0.5%, waiting for signs of recovery in the second half of 2013. In Portugal, GDP registered a homologous contraction of 4% in Q1, far from the 2.3% goal set by the government. As for Germany, factory orders, which fell short of market expectations (2.3% in Apr), as well as a decrease in the countrys trade surplus, highlighted this economys difficulties to regain strength. However, in UK, trade deficit decreased, as exports declined less than imports. Anti-government protests in Turkey worried markets, as Istanbuls stocks exchange suffered its highest daily loss of 10.5%, on Monday.

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Indexes Performance
Jun 3
PSI 20 STOXX 50 FTSE 100 NIKKEI 225 S&P 500 DJIA
5.856,74 2.747,74 6.525,12 13.261,82

Jun 4
5.930,99 2.755,70 6.558,58 13.533,76 22.285,52 1.631,38 15.177,54

Jun 5
5.873,11 2.709,33 6.419,31 13.014,87 22.069,24 1.608,90 14.960,59

Jun 6
5.793,19 2.676,21 6.336,11 12.904,02 21.838,43 1.622,56 15.040,62

Jun 7
5.850,07 2.724,08 6.411,99 12.877,53 21.575,26 1.643,38 15.248,12

Wkly Chg %
-1,50% -1,64% -2,60% -6,51% -3,65% 0,78% 0,88%

Unemployment rate signs modest growth

Although, 175,000 new jobs were created, US unemployment rate rose to 7.6% in May, as more people entered the work force. Also, manufacturing activity contracted in May after six months of growth (ISM index fell from 50.7 in Apr to 49.0 in May). Trade deficit increased 8.5% in Apr, partially led by a decrease in oil prices, which tampered the growth of imports. Additionally, new orders for U.S. factory goods rose in Apr, but not enough to reverse the prior month's plunge, adding to the signals of a slowdown in manufacturing activity.

HANG SENG 22.282,19

1.640,42 15.254,03

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Commodities Energy & Metals

4,96% -4,04% 4,60% Crude Oil WTI Natural Gas Crude Oil Brent -0,36% -2,75% -0,15% Gold Silver Copper

Strengthened Japanese Yen hits Nikkei 225

Japanese yen appreciated against the dollar, leading to the maintenance of the negative trend of Nikkei 225, observed in the last two weeks. China's trade surplus widened in May, as exports posted their lowest growth rate in almost a year, while imports unexpectedly fell. In Australia, RBA left its key interest rate at a historical low of 2.75%, as this countrys economy expanded at the slowest annual pace in almost two years (GDP expanded 2.5% in Q1 from a year earlier).

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Reference Rates
Jun 3
Euribor 1M Euribor 3M Euribor 6M Euribor 12M Eonia 0,113% 0,200% 0,299% 0,478% 0,078%

Jun 4
0,114% 0,200% 0,300% 0,482% 0,078%

Jun 5
0,114% 0,200% 0,300% 0,481% 0,081%

Jun 6
0,114% 0,200% 0,300% 0,480% 0,083%

Jun 7
0,115% 0,203% 0,308% 0,490% 0,078%

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Currencies
Jun 3
EUR/USD EUR/JPY EUR/GBP EUR/YUAN 1,307 130,370 0,853 8,014

Commodities
Jun 6
1,324

Jun 4
1,307 131,070 0,854 8,015

Jun 5
1,309 129,580 0,850 8,022

Jun 7
1,322 128,960 0,850 8,110

Wkly Chg %
1,74% -1,19% -0,58% 1,71%

128,940 0,849 0,128

FEP Finance Club; Forexpros

Oil prices shot up this week, as the dollar weakened against some of the major currencies. Also, better than expected on US job data lead these prices to soar. For the same reason, Gold prices fell slightly. Natural Gas fell sharply as U.S. stockpiles shot up way past expectations. Page 1/2

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WEEKLY REPORT
Portfolio Management
Markowitz Investment Strategy
Markowitz S&P 500

Jun 3rd Jun 7st

Markowitz beats S&Ps weekly return

This week, S&P registered a -1.93% return, while our portfolio managed to over perform, yielding a -0.76% weekly return. Since its revision, 11 weeks ago, Markowitz is with a daily volatility of 0.26% against a 0.75% one of the benchmark. Our long positions in bond assets (LEMB and GTIP) were the main sources of our negative return, closely followed by the one in American equity (SPY). On the other hand, our short position in African assets (AFK) yielded the highest positive contribution.

111%

96% 18-Out 26-Out 06-Nov 15-Nov 26-Nov 05-Dec 14-Dec 25-Dec 03-Jan 14-Jan 23-Jan 01-Feb 12-Feb 21-Feb 04-Mar 13-Mar 22-Mar 02-Apr 11-Apr 22-Apr 01-May 10-May 21-May 06-Jun

Overall return gap shrinks even further

Value portfolio continued its last week convergence trend. It yielded a -0.15% weekly return, while S&P 500 declined 1.93%. However, during the past 10 weeks, the volatility of the former has been higher than the one of the latter (1.40% and 0.77%, respectively). TravelCenters of America LLCs (TA) stock price decreased by 4%. This underperformance was deeply related to the behavior of the market (3.27 beta). Although in a smaller scale, this also underlay 1st Constitution Bancorps (FCCY) weekly performance (0.94 beta). QCR Holding (QCRH) reacted negatively to the divestures made in Community National Bank, even though it has been recovering since that. On the other hand, CPI Aerostructures Inc. (CVU) kept its good performance, with a 10% overall return, since it was added to our portfolio. American Capital Mortgage Investment (MTGE) is clearly the worst overall performer of our portfolio, with a 19% negative fluctuation, since we opened our long position. The main factors underlying this behavior were: The company significantly underperformed S&P 500 and its industry, on the basis of change in net income from last years Q1; MTGE stated that revenues plummeted by 54.1%, significantly underperforming against the industry average of 12.0%. Although it presented a rather high gross profit margin (53.20%), its net profit margin of -199.79% greatly underperformed the industry average. Page 2/2

Asset Contribution to Markowitz

GMF DBP GTIP LEMB AFK ESR ILF SPY -0,6% -0,4% -0,2% 0,0% 0,2%

Value Investment Strategy

Value S&P 500 115%

114%

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29-Nov 07-Dec 17-Dec 25-Dec 02-Jan 10-Jan 18-Jan 28-Jan 05-Feb 13-Feb 21-Feb 01-Mar 11-Mar 19-Mar 27-Mar 04-Apr 12-Apr 22-Apr 30-Apr 08-May 16-May 24-May 03-Jun

Asset Contribution to Value

FCCY CVU MTGE QCRH TA -6,0% -4,0% -2,0% 0,0% 2,0% 4,0% 6,0%