The U.S. Equity Market continued to rally from the previous quarter into April and May in a fairly steady manner. In June however, the U.S. Equity Market seemed to lose some steam and gave back some gains with volatility returning back to the Market . The year to date returns for the following indices are as follows:

                                                    2007 YTD Market Index Performance
                                                    Dow Jones Industrial Average               8.76%
                                                    S&P 500 Index                                    6.96%
                                                    NASDAQ Composite Index                7.78%
                                                    Lehman Aggregate Bond                      0.59%

The stock market has held up quite well despite the rise in interest rates. Some of the hesitation and slight pull back in June was driven by the upward movement in rates. Signs of stability on the economic front however helped refrain the market on the downside. The economic data reflected a mild re-acceleration in growth from the mid-cycle slowdown we were experiencing, while inflation pressures remained in check.

Some of the main concerns during the quarter were related to the slowdown in the housing market and the sub prime market problems which have surfaced again in light of the recent upward move in interest rates. Increased rates make homes less affordable. High inventories of unsold new homes, a significant slowdown in new home starts and declining existing home sales have caused home prices to come under some pressure. A lowering of home values affects the consumer's ability to borrow which in turn affects consumer spending. With reduced spending, the economy slows down since spending represents about 70% of the economic growth in the United States.

Although there are potential risks, there are still quite a few positives. Despite the recent rate increases, rates remain at historically accommodative levels. The U.S. economy remains healthy with a strong job market and a resurging manufacturing sector. World growth has been accelerating and U.S. companies are exporting at a record pace. The increased level of exports is such that the trade deficit actually declined in April whereas an increase was expected, particularly with the impact of higher prices on crude oil imports. Corporate earnings for the first quarter where quite a bit higher than forecasted by analysts and it is looking like that another round of earning surprises might be in the works for the second quarter, which would imply that current stock valuations still remain attractive relative to the fundamentals.

Although we are a bit more cautious at this juncture, particularly since this bull market has been in effect for almost five years, we continue to be optimistic overall and would view any pull back in the market as an opportunity. From all of us at Ifrah Financial Services, we wish you a pleasant rest of the summer and thank you for the opportunity to serve you.