Conference Call November 13, 2006

The Economy – Trade Deficit Trade deficit narrowed by 6.8% in September – Exports rose and imports fell for the month based primarily sharply lower energy prices US expected to report a record trade deficit for 2006 – Currently trade deficit is 12.3% higher than in September 2005

The Economy – Labor Labor Department reported weekly initial unemployment claims fell 20,000 to 308,000 for the week of November 4, week average for initial claims – excellent leading indicator for additions to non-farm payrolls – Consistent with moderate job growth

The Market Major stock indexes were up for the week – led by the Nasdaq rose 2.53% Historical data shows stock market returns are little affected by which political party is in power – investors were happy by the prospect of political change – Democrats have a majority in the House and a 1-vote majority in the Senate – Discussion of proposed policy changes – likely to alter stock prices in certain sectors

The Market (continued) Democrats have talked about: – Not extending the capital gain and dividend tax breaks due to expire in 2010 – Windfall profits tax for oil producers – Raising minimum wage – Allowing the federal government to negotiate drug prices under the Medicare Drug Benefit program Sent the healthcare sector down 1.64% last week

QInsight’s Business Cycle Shows Healthcare, Financial, Utilities, and Consumer Staples – historically outperformed the broad stock market indexes as US economy begins to weaken In the late Easeoff phase and the early Plunge phase often seen sharp downward corrections in stock prices before a very favorable period for stock prices begins in the mid- to late-Plunge phase

Leading and Lagging Sectors Top Performing Sectors: – Telecommunication Services – Energy – Consumer Discretionary Lagging Sectors: – Health Care – Information Technology – Industrials