Market Commentary by Scott J. Brown, Ph.D., Chief Economist

Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services

The economic data were mixed, but remained consistent with moderate growth in the near term. Consumer confidence fell in January. Motor vehicle sales picked up. Home prices were still falling in November. Construction spending improved in December (likely reflecting mild weather). The January Employment Report was stronger than expected, helped by mild weather. Nonfarm payrolls rose by 243,000 and the two previous months were revised a net 60,000 higher (note that payrolls fell by 2.689 million in January before seasonal adjustment).

The unemployment rate fell to 8.3%, from 8.5% in December and 9.1% a year ago, due largely to a drop in labor force participation. The employment/population ratio held steady at 58.5%, little changed over the last two years. The Household Survey results noted that 206,000 people were not able to work during the January survey period due to adverse weather, vs. a 425,000 average over the last five Januarys (this figure is not directly comparable to the payroll numbers, but it gives you an idea of the magnitude of the weather impact).

In his testimony to the House Budget Committee, Fed Chairman Bernanke noted that the recovery has been “frustratingly slow” and remains vulnerable to shocks. He said “the outlook remains uncertain” and needs to be monitored closely. Bernanke said that the federal budget deficit will decrease as the economy recovers and tax revenues rebound. However, even after economic conditions return to normal, “the nation will still face a sizeable structural budget gap.” And then, even if discretionary spending were cut to zero, we would still have a deficit. When asked if the Fed’s dual targeting system implied that the Fed would tolerate higher inflation in the short term in order to push unemployment lower, Bernanke said that the Fed will not seek to raise inflation.

Next week, the economic calendar thins out considerably. Bernanke testifies on Tuesday, but this is expected to be a repeat of what he gave the House Budget Committee. The markets typically don’t pay much attention to the monthly trade data, but the December figures have some implications for GDP revisions.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 2/3/2012

S&P Sector Performance (YTD) – 2/3/2012

Economic Calendar

Important Disclosures

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. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. 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 February 2nd, 2012.

©2012 Raymond James Financial Services, Inc. member FINRA / SIPC.

“In my opinion, children are innately musical and artistic at that age,” Eric Branscome, assistant professor and coordinator of music education at Austin Peay State University, said. “They love drawing, they love coloring, they love singing, they love painting.”

Beginning at 4:30pm on February 7th, APSU faculty and students will host the Children’s Arts InterAction Program in the Children’s Library of the Clarksville-Montgomery County Public Library. The program, which is free and open to all pre-school and early elementary aged children, will continue on the first Tuesday of each month throughout the semester.

“The program is basically targeting younger children, preschool-aged children, early elementary school-age children,” Branscome said. “It will have music, singing time, music activities. A lot of our student organizations will be going over to perform for the kids. And at the end of the time, the (APSU) art education students will lead a craft or related art activity for the kids.”

The activities will all be focused around literacy concepts developed by the library staff.

In addition to providing a valuable service for the community, the Children’s Arts InterAction program will also help prepare APSU students for their future careers.

“One of the main reasons we wanted to start this, in addition to community outreach, was so that our students in music education and art education could get extra experience working with these young kids before they go out and do student teaching,” Branscome said.

The program will meet at 4:30pm at the library on the following days:

• February 7th
• March 6th
• April 10th
• May 8th

For more information on Children’s Arts InterAction, contact Branscome at or Jennifer Snyder, APSU assistant professor of art education, at .

“Love in the Age of Communication” could easily be the subtitle of “For Better,” Eric Coble’s two-act show presented by the Cumberland Arts Centre on February 10th, 11th, 17th and 18th.

This romantic farce follows the engagement and impending marriage of Karen Baedeker, who has met her beloved Max Aphelion all of two times, but who shares emails, text messages, IMs and other various media multiple times a day.

Jan Dial directs a cast of CAC regulars – Colleen Hyder (Karen), Pat Cunningham (Wally), Susan DeJesus (Francine), Bill Colclough (Michael), Jeff Wellington (Stuart) and Amanda Jennison-Sousa (Lizzie), assisted by Stage Manager Pam Halchisek.

Tickets are $30.00 plus tax and include dinner with a choice of two entrees.

Reservations are required, so call 931.552.1106.

This event is free and open to the public.

For more details on the Kleeman Center’s “Words for the Heart”, please contact the Clarksville Parks and Recreation at 931.645.7476 or visit www.cityofclarksville.com.

The race entry fee is $10.00 for students and $12.00 for non-students. Registration will begin at 9:00am and the race will start at 10:00am at the Dunn Center.

For more information, please contact Lauren Wilkinson at 931.221.7564 or .

Clarksville, TN

The samples were placed in test tubes, and back in his lab inside the APSU Sundquist Science Complex, Lebkuecher noticed that the algae were thriving. This was not good news for the creek.

“A problem with pollution or excess nutrients (such as fertilizers) is they cause what we call algal blooms (rapid algae growth),” he said. “I found the water quality within the creeks is poor. The reasons for the poor water quality include excessive sediments from erosion and high concentrations of nutrients as a result of fertilizer use by local farms.”

The Tennessee Department of Environment and Conservation recently awarded Lebkuecher a $78,000 contract to expand his study of the impacts of water pollution on algae and other microscopic organisms throughout the Red River Watershed. His work will help determine the health of local streams and the impacts of pollution on aquatic organisms.

“Algae are such accurate indicators of habitat impairment that the data can be used directly for watershed management decisions,” he said. “Some algae are indicators of heavy erosion. Some are indicators of high concentration of nutrients.”

The objectives of the state contract include developing standardized methods for state researchers to evaluate the impacts of pollution in Tennessee rivers and assessing the effects of water pollution in the Red River Watershed.

“The grant also includes a little bit of money for me to hire students,” Lebkuecher said. Those students, through hands on fieldwork, will gain experience in biological monitoring.

“Hopefully, using these standard protocols I’m writing now, the state will be able to hire Austin Peay graduates to continue the work,” he said. “I teach a phycology class, and a major goal of that course is to train students to do that type of work.”

The work conducted under this new state contract could provide the first step in cleaning and protecting local waterways. For more information on this research, contact Lebkuecher at .

The money has been used to replace the roof at Sevier Station.

“As a society we are ‘preserving the past for the future’. Clarksville has a rich heritage that is slowly disappearing along with its buildings. As a society we are trying to prevent this,” said Sandra Stacey, President of the Montgomery County Historical Society, “We are proud to be part of the restoration of Sevier Station.”

Parking will be available across from Greenhill Church, located at 311 Walker Street.

For a more information, please visit www.cityofclarksville.com or call 931.645.7476.

Meat will be smoked on Saturday, April 7th and ready for pick up that same day from 2:00pm-5:00pm. Pick up point is located off I-24, Exit 11 in the parking lot at the corner of Highway 76 and Hornbuckle Road (beside the Shell Station).

April 7th is the Saturday before Easter, so it’s a great way to support your local Boy Scouts, and have something delicious to serve for Sunday Dinner.

Money raised will go towards the purchase of a larger trailer for Troop 503 to be used for outings and activities.

For more information or to purchase tickets, contact Alicia at 931.358.3606.

The gymnasium will be closed February 20th-26th to replace flooring. The center will return to normal operating hours the Monday following the annual maintenance period.

For more details on this or other community center activities, please contact Parks and Recreation at 931.645.7476.

Rose Austin, bursar, received the PeayFormance Partner Award. The Enrollment Management and Academic Support presents this award quarterly to faculty, staff or administrators who work in partnership with EMAS staff to demonstrate excellent service.

Charles Booth, staff writer in the APSU Office of Public Relations and Marketing, will have his short story, “The Last Blood Maple,” published in a forth-coming edition of SLAB (Sound and Literary Art Book) magazine, produced by Slippery Rock University. His short story “Medjugorje” will also appear this spring in Booth: A Journal – a literary magazine named after the writer Booth Tarkington and published by Butler University.

Johnathan Button, financial aid assistant in the Office of Financial Aid and Veterans Affairs, received the PeayFormance Customer Service Award. The Enrollment Management and Academic Support presents this award quarterly to a professional or clerical staff member nominated by his or her peers as exemplifying service above and beyond the call of duty to APSU students, faculty and the general campus community.

Dr. Culley Carson-Grefe, professor of French and Spanish, attended the Hawaii International Conference on Arts and Humanities from January 10th-13th in Honolulu. She chaired a session on second language studies and presented a paper, titled “Apples to Apples: Teaching Translation.” She also participated in a panel on “Promoting Innovation in World Language Instruction: Issues, Examples, Action.”

Dr. Carter Smith, assistant professor of criminal justice and homeland security, had a paper, “A Comprehensive Literature Review of Military-Trained Gang Members,” published in the Fall 2011 Journal of Gang Research and also is included in the National Criminal Justice Reference Service.