Commercial Equity Partners

1. Preliminary fourth quarter GDP numbers were revised downward, showing the economy’s biggest quarterly decline in 26 years. During the last three months of 2008, GDP fell at an annual paceof 6.2%, much higher than the 3.8% that was reported during last month’s advanced reading. One of the main contributors to the declinewas a 4.3% drop in consumer spending, which makes up two-thirds of the nation’s economic activity. GDP is forecast to fall another 5% this quarter.
2. The housing market has continued to falter during the start of 2009. Builders broke ground on the fewest number of houses on record during January, as starts fell to an annual pace of 466k.Building permits also declined during January, dropping 4.8% to an annual rate of 521k. Sales of existing homes slipped to their lowest level in 12 years, dropping to an annual pace of 4.49 million units, while sales of new homes tumbled 10% in January and now sit at their lowest level on record at an annual pace of 309k a year. All this data shows that the housing downturn shows no signs of a turnaround in the near future.
3. Job losses continued to mount throughout February as employers try to cut costs to stay afloat. An estimated 650k jobs were cutin February, according to ADP Employment Change data. Estimatesalso have the unemployment rate rising in February to a rate of 7.9%, after coming in at 7.6% in January.

Equity Markets

• Stocks end month in negivate territory all across major industies.
• Growth beat value across all market caps.
• Domsectially, large cap growth was the leader.
• The best performing markets were telcom, information technology, and consumer staples.
• The worst performing markets were financials, industrial, and healthcare.