Midyear Outlook 2017 Spread - IHT Wealth Management...D positive so far in 2 0 could also benefit t...
9
Member FINRA/SIPC
Transcript of Midyear Outlook 2017 Spread - IHT Wealth Management...D positive so far in 2 0 could also benefit t...
Member FINRA/SIPC
U.S
. Sm
all
Cap
Stoc
ksU
.S. s
mal
l cap
s h
ave
ben
efite
d f
rom
acc
om
ay b
enefi
t fr
om
fisc
al p
olic
y ch
ang
es, t
h
Emer
ging
M
arke
ts (E
M)
Nea
r-te
rm c
atal
ysts
(g
lob
al g
row
th, m
on
ete
rm t
ren
ds
(six
bill
ion
co
nsu
mer
s) o
ffer
Cycl
ical
Se
ctor
sTe
ch
no
log
y is
po
siti
on
ed t
o b
enefi
t fr
om
g
row
th a
s b
usi
nes
s in
vest
men
t p
ote
nti
alp
rod
uct
ivit
y. In
du
str
ials
may
ben
efit
fro
man
d in
fras
tru
ctu
re p
roje
cts
and
str
on
ger
gsh
ou
ld b
enefi
t fr
om
der
egu
lati
on
th
at m
ad
ivid
end
s, w
hile
tig
hte
r m
on
etar
y p
olic
y
Mas
ter L
imite
d Pa
rtne
rshi
psT
he
Tru
mp
ad
min
istr
atio
n’s
stan
ce o
n e
ne
yiel
ds
rem
ain
ver
y at
trac
tive
bu
t in
tro
du
c
Inve
stm
ent-
Gra
de
Corp
orat
esW
e co
ntin
ue to
find
rel
ativ
e va
lue
in in
vest
cont
inue
d st
reng
th in
cre
dit m
arke
ts a
nd th
Mor
tgag
e-B
acke
d Se
curi
ties
(MB
S)A
mo
ng
hig
h-q
ual
ity
bo
nd
s, M
BS
co
nti
nu
trad
e-o
ff b
etw
een
yie
ld a
nd
inte
rest
rat
e
Ban
k Lo
ans
Att
ract
ive
yiel
ds
and
co
up
on
pay
men
ts t
hm
ake
ban
klo
ans
less
likel
yto
suff
erp
rice
Econ
omy
GD
P G
row
th N
ea
r 2
.5%
W
e co
ntin
ue to
look
for t
he
U.S
. eco
nom
y to
exp
and
up
to 2
.5%
in 2
017,
alth
ough
po
tent
ial d
elay
s in
pas
sing
m
ajor
fisc
al p
olic
ies
intr
oduc
e so
me
risk
to th
e do
wns
ide.
D
ata
on c
onsu
mpt
ion,
em
ploy
men
t, ho
usin
g,
man
ufac
turin
g, a
nd s
ervi
ces
all p
oint
tow
ard
impr
ovem
ent
in th
e m
onth
s an
d qu
arte
rs
ahea
d fo
llow
ing
slug
gish
firs
t qu
arte
r GD
P gr
owth
.
Stoc
ks6 –
9%
Re
turn
s
As
inve
stor
s in
crea
sing
ly tr
ust
that
the
econ
omy
can
stan
d on
its
own
with
out t
he n
eed
of m
onet
ary
polic
y su
ppor
t, bu
sine
ss fu
ndam
enta
ls s
houl
d ta
ke o
ver a
s th
e pr
imar
y m
arke
t eng
ine
and
corp
orat
e pr
ofits
will
take
on
incr
easi
ng
impo
rtan
ce. W
e ha
ve s
light
ly
rais
ed o
ur 2
017
S&P
500
Inde
x to
tal r
etur
n fo
reca
st to
6 –
9%
, co
mm
ensu
rate
with
exp
ecte
d ea
rnin
gs g
ains
.
Inter
natio
nal
Em
erg
ing
ove
r D
ev
Thou
gh fu
ndam
enta
ls
firm
ing,
gro
wth
in E
uro
and
Japa
n ha
s on
ly g
rim
prov
ed fr
om lo
w le
vM
onet
ary
polic
y ha
s f
econ
omic
and
fina
ncia
gain
s w
ith c
entr
al b
anco
ntin
uing
, yet
eco
nom
refo
rms
are
still
nee
dere
mai
n ca
utio
us o
n de
inte
rnat
iona
l mar
kets
,m
ore
cons
truc
tive
on
mar
kets
(EM
).
Mon
etar
y po
licy
Slo
w p
ath
to
no
rma
liza
tio
n.
The
Fed
has
been
slo
wly
pow
erin
g do
wn
supp
ort
sinc
e it
star
ted
tape
ring
its b
ond
purc
hase
s in
Jan
uary
201
4. A
lthou
gh th
e sl
ow p
ath
to
norm
aliz
atio
n ac
cele
rate
d in
the
first
hal
f of 2
017,
we
expe
ct th
e Fe
dera
l Ope
n M
arke
t Com
mitt
ee’s
(F
OMC)
gra
dual
app
roac
h to
rate
hik
es to
con
tinue
an
d lo
ok fo
r tw
o or
thre
e ra
te h
ikes
in 2
017.
Busi
ness
fund
amen
tals
No
w t
ak
ing
co
ntr
ol.
Glob
al m
onet
ary
polic
y ha
s he
lped
pus
h eq
uity
pr
ices
hig
her s
ince
201
4, d
espi
te n
o re
al e
arni
ngs
grow
th. T
hat d
ynam
ic h
as b
egun
to c
hang
e an
d w
e ex
pect
sol
id e
arni
ngs
gain
s in
201
7. Th
e ce
ntra
l ban
k-dr
iven
mar
ket h
as b
ecom
e a
mor
e fu
ndam
enta
l-driv
en m
arke
t, w
hich
may
favo
r act
ive
man
agem
ent g
oing
forw
ard.
Econ
omic
gro
wth
Co
nfi
de
nce n
ot
en
ou
gh
, ye
t.
Busi
ness
and
con
sum
er c
onfid
ence
hav
e in
crea
sed,
bu
t hav
e no
t yet
pro
vide
d a
sign
ifica
nt b
oost
to th
e ec
onom
y. T
rend
s in
bus
ines
s sp
endi
ng h
ave
been
en
cour
agin
g. P
olic
y un
cert
aint
y is
like
ly p
artly
to
blam
e fo
r thi
s di
scon
nect
and
ther
efor
e gr
eate
r po
licy
clar
ity m
ay h
elp
unle
ash
“ani
mal
spi
rits”
and
sp
ur g
row
th.
Fisc
al p
olic
y
Pro
-gro
wth
po
ten
tia
l, b
ut
wh
en
?
Impl
emen
tatio
n of
pro
-gro
wth
pol
icie
s su
ch a
s ta
x re
form
, inf
rast
ruct
ure
spen
ding
, and
der
egul
atio
n re
mai
n lik
ely,
but
the
timet
able
may
ver
y w
ell
be p
ushe
d ba
ck d
ue to
pol
itica
l dis
trac
tions
in
Was
hing
ton
DC
Inte
rms
ofpo
tent
iale
arni
ngs
ON
STA
ND
BY
PO
WE
RIN
G U
P
PO
WE
RIN
G D
OW
N
ON
STA
ND
BY
his
eco
no
mic
cyc
le.
able
to
sta
rt f
ollo
win
g
, rai
sin
g r
ates
tw
ice
do
ing
so,
th
e Fe
d
om
y h
as la
rgel
y m
et
ull
emp
loym
ent,
th
at
stan
d o
n it
s o
wn
tw
o
ovi
de
the
bac
ksto
p t
o
s p
rovi
ded
th
rou
gh
ou
t h
en
gin
es a
nd
mar
ket
wn
mo
net
ary
po
licy,
p
ote
nti
ally
tak
e fi
scal
b
y.
s n
ew fi
scal
-led
sh
ifti
ng
mar
ket
nar
row
tra
din
g r
ang
e n
th
e p
ost
-ele
ctio
n
ice
in m
any
of t
he
mp
ad
min
istr
atio
n.
po
litic
al m
om
entu
m
ened
eve
n a
s m
ain
ed h
igh
. It i
s h
at d
esp
ite
thes
e an
aged
to
pro
gre
ss
or
very
nea
r, al
l-ti
me
ess,
bas
ed o
n in
tere
st
ility
, rem
ain
ed la
rgel
y sc
al p
olic
y o
n s
tan
db
y,
such
as
ren
ewed
ct
as
a m
arke
t cat
alys
t.
bu
t mo
net
ary
po
licy
is
ial m
arke
t str
eng
th.
ry p
olic
y as
a m
arke
t er
al in
vest
ing
o
fo
rm a
go
od
pla
n
on
to
th
e m
arke
t at
ion
of c
on
tin
ued
ar
e sh
ifti
ng
to
new
ro
le f
or
corp
ora
te
g t
he
evo
lvin
g
ersi
fied
inve
sto
rs. U
se
hif
t In
Mar
ket C
on
tro
l as
nes
fu
elin
g t
his
mar
ket.
Her
e ar
e w
here
thes
e m
arke
t dri
vers
sta
nd a
nd
the
them
es w
e’ll
be w
atch
ing
as w
e lo
ok a
head
to
the
rest
of 2
017:
Stoc
ks
Fore
cast
s @
A G
lanc
eEn
gine
Bond
s
Give
n th
e en
viro
nmen
t we
expe
ct o
ver t
he s
econ
d ha
lf of
201
7, ou
How
to
Inve
st
mie
s al
ike,
the
abi
lity
cent
ral b
ank
supp
ort
ts o
ver
the
bala
nce
of
supp
ort
as it
m
aliz
atio
n. C
onsi
derin
g an
d la
rgel
y st
eady
, he
Fed
no
long
er
leve
l pol
icy
mea
sure
s.
ree
rate
hik
es in
ua
lly re
mov
es it
s S
. gro
wth
am
id lo
w
ccom
pani
ed b
y co
re
bove
the
Fed
tar
get
on. B
ut t
here
are
stil
l on
infla
tion,
incl
udin
g y,
a lo
w la
bor
forc
e st
able
dol
lar,
that
an
ove
the
Fed’
s 2%
ged
abou
t 18
5,00
0 is
like
ly to
slo
w a
t
this
sta
ge o
f th
e bu
sine
ss c
ycle
. But
eve
n if
payr
oll
grow
th w
ere
to d
eclin
e to
a 1
00,0
00 to
125
,000
m
onth
ly p
ace,
we
susp
ect
the
Fed
wou
ld s
till s
tay
on t
rack
to h
ike
rate
s at
leas
t tw
ice
this
yea
r. W
age
grow
th a
t 2.
5% re
mai
ns b
elow
the
4.0
% p
ace
that
ha
s hi
stor
ical
ly c
ause
d ce
ntra
l ban
kers
to r
aise
rat
es
aggr
essi
vely
, but
has
impr
oved
eno
ugh
to k
eep
the
Fed
on it
s st
ated
tra
ck.
Whi
le s
uch
a ra
te h
ike
path
wou
ld b
e co
nsis
tent
w
ith t
he F
OM
C’s
sta
tem
ents
, mon
etar
y of
ficia
ls
will
nee
d to
bal
ance
the
ir em
ploy
men
t an
d in
flatio
n m
anda
tes
with
the
pot
entia
l U.S
. dol
lar
impa
ct.
Follo
win
g a
sign
ifica
nt r
ally
fro
m la
te 2
014
to e
arly
20
15, t
he d
olla
r ha
s be
en la
rgel
y ra
nge
boun
d [F
igu
re 2
]. Im
bala
nces
may
occ
ur if
the
dol
lar
gets
to
o st
rong
rela
tive
to o
ther
cur
renc
ies,
par
ticul
arly
in
EM
— re
pres
entin
g ov
er h
alf
of g
loba
l eco
nom
ic
outp
ut —
whe
re w
eak
curr
enci
es re
lativ
e to
the
do
llar
can
lead
to c
apita
l flig
ht, h
ighe
r de
bt s
ervi
ce
paym
ents
, and
food
infla
tion.
Pol
icym
aker
s ar
e m
indf
ul o
f th
is, a
s pu
blis
hed
stat
emen
ts e
xpre
ssed
a
poss
ible
shi
ft in
tac
tics
tow
ard
a m
arke
t-ba
sed
form
of
tight
enin
g, re
ferr
ed to
as
bala
nce
shee
t ru
noff
, whe
reby
the
cen
tral
ban
k ca
n re
duce
the
siz
e of
its
bala
nce
shee
t by
tap
erin
g th
e re
inve
stm
ent
of
mat
urin
g bo
nds,
pot
entia
lly b
egin
ning
in e
arly
201
8.
Look
ing
over
seas
, cen
tral
ban
k po
licy,
par
ticul
arly
in
Euro
pe a
nd J
apan
, con
tinue
s to
resu
lt in
low
yie
lds
for
deve
lope
d ov
erse
as e
cono
mie
s. W
ith b
ette
r gr
owth
em
ergi
ng in
man
y Eu
rope
an c
ount
ries,
but
in
flatio
n st
ill s
ubdu
ed, t
he E
urop
ean
Cen
tral
Ban
k
(EC
B) a
ppea
rs to
be
to lo
osen
fur
ther
(wh
also
not
like
ly to
tig
htup
. The
Ban
k of
Jap
apr
ovid
ing
mor
e op
timbu
t st
ill w
arni
ng t
hat
mai
ntai
ned
at c
urre
nra
tes
over
seas
may
km
ovin
g si
gnifi
cant
ly
Glo
bal m
onet
ary
polic
y ha
s be
en a
n im
port
ant
forc
e he
lpin
g to
pus
h eq
uity
pric
es h
ighe
r si
nce
2014
. As
cent
ral b
ank
bala
nce
shee
ts e
xpan
ded,
sto
ck p
rices
be
nefit
ed a
s bo
nds
beca
me
less
att
ract
ive
in a
low
-yi
eld
wor
ld. C
onse
quen
tly, e
quity
pric
es c
limbe
d de
spite
flat
ear
ning
s, re
sulti
ng in
a m
arke
t dr
iven
by
a cl
imbi
ng p
rice-
to-e
arni
ngs
ratio
(inv
esto
rs w
illin
g to
pa
y m
ore
for
pote
ntia
l fut
ure
earn
ings
).
As
the
Fed
has
begu
n to
tig
hten
its
polic
y, t
he
cent
ral b
ank-
driv
en m
arke
t ha
s be
com
e m
ore
of
a fu
ndam
enta
lly-d
riven
mar
ket.
In a
fun
dam
enta
l en
viro
nmen
t, w
hich
incl
udes
fisc
al p
olic
y, b
usin
esse
s ha
ve a
mor
e di
ffer
entia
ted
resp
onse
to t
he m
acro
en
viro
nmen
t an
d in
vest
ors
take
cue
s fr
om b
usin
ess
fund
amen
tals
(ear
ning
s, s
ales
, cas
h flo
w, e
tc.)
. The
re
turn
of
a m
ore
“cla
ssic
” bu
sine
ss c
ycle
whe
re
fund
amen
tals
driv
e st
ock
perf
orm
ance
sho
uld
favo
r ac
tive
stra
tegi
es g
oing
forw
ard.
Red
uced
relia
nce
on
falli
ng c
orre
latio
ns b
eha
s he
lped
driv
e im
prst
rate
gies
. It
is m
uch
the
mar
ket
prod
uces
m
arke
t w
here
eve
ryt
a ch
alle
ngin
g en
viro
ndi
ffer
entia
te t
hem
sel v
Bro
ader
mar
ket
lead
ede
velo
pmen
t fo
r ac
tiv50
0 le
ads
all i
nves
tmas
set
clas
ses
can
det
area
s, s
uch
as in
tern
abe
en o
utpa
cing
U.S
. pr
ovid
ing
mor
e op
po
820
19
s
Sour
ce: L
PL R
esea
rch,
Ned
Dav
is R
esea
rch
05/
19/1
7
110
105
100 95 90 85 80 75
‘16‘15
‘14‘13
‘17
U.S
. Dol
lar I
ndex
The
U.S
. Dol
lar
Has
Bee
n La
rgel
y R
ange
Bou
nd S
ince
201
52
Hik
es;
wer
Sour
ce: L
PL R
esea
rch,
Fac
tSet
05
/19/
17
Curre
ncyr
iskis
afo
rmof
riskt
hata
rises
from
the
chan
gein
price
ofon
e
eser
ve, B
loom
berg
05
/19/
17
calc
ulat
ed b
ased
on
the
pric
ing
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2
‘04‘02
‘06‘08
‘10‘12
Med
ian
63-D
ay C
orre
latio
n of
S&
P 50
0 St
ocks
to th
e S&
P 50
0 In
dex
Activ
e M
anag
emen
t Spa
rk
ers Do
wn
Low
er C
orre
latio
ns a
nd M
ore
Disp
ersi
on M
ay M
ean
Opp
ortu
nity
3
Activ
e m
anag
emen
t inv
olve
s r
inde
x by
pre
dict
ing
mar
ket a
ctm
anag
ers
inco
rrect
ly a
ntic
ipat
%4 3 2 1 0
‘08‘06
‘04‘02
‘00‘96
‘94‘92
‘90‘98
Grow
th in
U.S
. Rea
l Out
put p
er H
our (
5-Ye
ar A
vera
ge)
Gro
wth
Nee
ds a
Pro
duct
ivit
y In
ject
ion
5 cent
ral b
ank.
Mea
nwhi
le, a
ntic
ipat
ed fi
scal
le
gisl
atio
n m
ay p
rovi
de f
urth
er in
cent
ives
for
bu
sine
sses
to
take
eco
nom
ic r
isks
, suc
h as
in
vest
ing
in p
rope
rty,
pla
nt, a
nd e
quip
men
t,
to p
ositi
on f
or f
utur
e gr
owth
. Thi
s w
ould
be
a ch
ange
fro
m r
ecen
t ye
ars,
whe
re m
any
busi
ness
es u
sed
low
rat
es t
o re
turn
cas
h to
in
vest
ors
by is
suin
g de
bt a
nd b
uyin
g ba
ck s
hare
s or
pay
ing
divi
dend
s, c
hoos
ing
the
finan
cial
ris
k fr
om m
ore
debt
on
thei
r ba
lanc
e sh
eets
ove
r th
e ec
onom
ic r
isk
of in
vest
ing
in t
heir
busi
ness
es. A
n im
prov
emen
t in
cap
ital i
nves
tmen
t tr
ends
wou
ld
also
like
ly b
oost
pro
duct
ivit
y, w
hich
is e
ssen
tial
for
rais
ing
livin
g st
anda
rds.
Pro
duct
ivity
gro
wth
rem
ains
the
key
to a
ny
sust
aina
ble
incr
ease
in t
he r
ate
of e
cono
mic
gro
wth
ov
er t
he lo
ng te
rm. T
here
are
tw
o pr
imar
y dr
iver
s of
eco
nom
ic g
row
th: a
larg
er w
orkf
orce
and
an
incr
ease
in w
hat
a m
embe
r of
the
wor
kfor
ce c
an
prod
uce,
thr
ough
bet
ter
trai
ning
or
bett
er re
sour
ces.
Th
e la
tter
is w
hat
we
call
prod
uctiv
ity a
nd it
has
sl
owed
con
side
rabl
y th
roug
hout
the
exp
ansi
on
[Fig
ure
5].
The
re a
this
, inc
ludi
ng d
imi
deve
lopm
ent
and
lco
ntra
ctio
n in
em
pcr
isis
. Bus
ines
s in
vof
impr
ovin
g pr
odu
pick
up
in t
he fi
rst
prod
uctiv
ity w
ill h
aar
e to
see
impr
ove
Fisc
al p
olic
y co
uld
spen
ding
to h
elp
dap
proa
ch m
ay li
mi t
dolla
r, el
imin
atin
g t
inte
rfer
e w
ith e
xpo
mak
es d
omes
tic g
obu
yers
). G
loba
l GD
posi
tive
so f
ar in
20
coul
d al
so b
enefi
t t
expo
rts.
Con
side
rinin
vest
men
t, g
over
nar
e st
icki
ng w
ith o
ugr
owth
in 2
017.
S. e
cono
my
to
houg
h po
tent
ial d
elay
s in
trod
uce
som
e w
-tre
nd p
ace
is s
till
ajec
tory
tha
t th
e ou
ghou
t th
e ex
pans
ion
com
e, p
rodu
ctio
n,
evel
s ac
hiev
ed in
, we
still
see
U.S
. 20
17 f
orec
ast
with
on
in 2
018.
Firs
t w
as d
isap
poin
ting,
w
eakn
ess
has
been
ar
s as
a c
ombi
natio
n pe
rhap
s an
en
t pr
oces
s ha
s pr
oved
gro
wth
in
on
cons
umpt
ion,
ac
turin
g, a
nd s
ervi
ces
all p
oint
tow
ard
pote
ntia
l im
prov
emen
t in
the
m
onth
s an
d qu
arte
rs a
head
fol
low
ing
slug
gish
firs
t qu
arte
r G
DP
gro
wth
.
Whi
le c
onfid
ence
am
ong
cons
umer
s an
d bu
sine
sses
rem
ains
ver
y hi
gh (s
o ca
lled
“sof
t da
ta”)
, mea
sure
s of
act
ual e
cono
mic
act
ivity
(“ha
rd
data
”), s
uch
as G
DP,
hav
e no
t be
en a
s st
rong
in t
he
first
par
t of
201
7. T
he s
oft
data
nee
ds to
tra
nsla
te
into
str
onge
r ec
onom
ic a
ctiv
ity to
reac
h ou
r G
DP
gr
owth
fore
cast
for
2017
. One
like
ly re
ason
for
this
dis
conn
ect
is c
ontin
ued
polic
y un
cert
aint
y,
alth
ough
we
have
see
n a
rece
nt p
icku
p in
bus
ines
s in
vest
men
t. W
hile
ena
ctin
g ef
fect
ive
pro
-gro
wth
po
licy
wou
ld a
lmos
t ce
rtai
nly
bene
fit t
he e
cono
my,
gr
eate
r po
licy
clar
ity m
ay b
e en
ough
to u
nlea
sh
“ani
mal
spi
rits”
and
hel
p sp
ur g
row
th.
The
rece
nt im
prov
emen
t in
job
grow
th w
ith
mod
erat
e w
age
gain
s al
low
s fo
r co
nsum
ptio
n gr
owth
with
out
the
need
for
an
acco
mm
odat
ive
cess
ion
Q1
‘09 Q
1‘10
Q1
‘11 Q
1‘12
Q1
‘13 Q
1‘14
Q1
‘15 Q
1‘16
Q1
‘17‘17
E
oduc
t: Qu
antit
y In
dex
(% C
hang
e fro
m P
rior Q
uarte
r, Se
ason
ally
Adj
uste
d An
nual
Rat
e)
Actu
al(Q
uarte
rly)
Estim
ated
(Ann
ual)
U.S
. Eco
nom
ic G
row
th i
n 20
17
reau
of
s 0
5/19
/17
on.
is th
e m
onet
ary
valu
e of
all
the
finis
hed
good
s an
d se
rvic
es p
rodu
ced
with
in a
cou
ntry
’s bo
rder
s in
a
Sour
ce: L
PL R
esea
rch,
Bur
eau
of L
abor
Sta
tistic
s 0
5/19
/17
hedu
led M
ainten
ance
Due
10-Year Treasury Yield
S&P
500
Trai
ling
PE R
atio
Annual CPI Change
%%
18 16 14 12 10 8 6 4 2 0
16 14 12 10 8 6 4 2 0 -2 -40
205
2510
3015
350
5
Trai
ling
PE v
s. 1
0-Ye
ar T
reas
ury
Yiel
d
Low
er In
flatio
n an
d Lo
wer
Inte
rest
Rat
es H
ave
Hist
oric
ally
Cor
rela
ted
to H
ighe
r Pric
e-to
-E
Trai
ling
PE v
Curre
nt
that
the
eco
nom
y he
nee
d of
ne
ss f
unda
men
tals
y
mar
ket
driv
er.
will
be
incr
easi
ngly
ba
lanc
e of
201
7 th
at e
arni
ngs
r th
e ba
lanc
e of
ai
se o
ur 2
017
ecas
t to
6 –
9%
, ou
sly,
driv
en b
y:
row
th; 2
) mid
- to
s; 3
) a s
tabl
e pr
ice-
0; a
nd 4
) pro
spec
ts
ings
in 2
018.
ratin
g ea
rnin
gs
sica
lly fl
at, a
t qu
ently
, mar
ket
een
larg
ely
due
earn
ings
rat
io
This
dyn
amic
n
2017
, we
profi
ts, d
riven
by p
oten
tial i
mpr
ovem
ent
in e
cono
mic
gro
wth
, re
silie
nt p
rofit
mar
gins
, a s
tabl
e U
.S. d
olla
r, an
d re
boun
ding
ene
rgy
profi
ts. W
e be
lieve
S&
P 5
00
earn
ings
gro
wth
nea
r 10
% is
att
aina
ble,
put
ting
earn
ings
for
the
inde
x in
the
ran
ge o
f $1
30 p
er
shar
e, e
ven
with
out
any
mat
eria
l im
pact
fro
m
fisca
l pol
icy
chan
ges
this
yea
r.
Cor
pora
te A
mer
ica
is o
ff to
a g
ood
star
t tow
ard
hitt
ing
our e
arni
ngs
targ
et. F
irst q
uart
er e
arni
ngs
seas
on w
as a
ver
y go
od o
ne, w
ith S
&P
500
profi
ts ri
sing
by
a m
uch
bett
er th
an e
xpec
ted
15%
yea
r ove
r yea
r (Th
omso
n da
ta) [
Fig
ure
6]
whi
le c
ompa
ny g
uida
nce
for
the
rem
aind
er
of t
he y
ear
was
als
o po
sitiv
e. T
he b
ar fo
r gr
owth
was
fai
rly lo
w, a
s th
e co
mpa
rison
was
re
lativ
ely
easy
con
side
ring
the
stru
ggle
s of
ea
rly 2
016,
par
ticul
arly
in t
he e
nerg
y se
ctor
. But
ev
en e
xclu
ding
the
str
ong
cont
ribut
ion
from
re
boun
ding
ene
rgy
sect
or p
rofit
s, S
&P
500
ea
rnin
gs w
ere
still
up
over
10%
yea
r ov
er y
ear
in
the
first
qua
rter
. Eve
n if
the
earn
ings
tra
ject
ory
slow
s so
me
over
the
cou
rse
of t
he y
ear
as
com
paris
ons
with
201
6 ge
t to
ughe
r, bu
sine
ss
Q1
‘15 Q
1‘16
Q2
‘15 Q
2‘16
Q3
‘15 Q
3‘16
Q4 14 Q
4‘15
Q4
‘16 Q
1‘17
2018
E20
17E
arni
ngs
Grow
th
Actu
alRe
sults
Cons
ensu
sEs
timat
es
Hig
her
Valu
atio
ns H
ave
A F
air
Am
ount
of S
uppo
rt7
Sour
ce: L
PL R
esea
rch,
Fac
tSet
, Tho
mso
n Re
uter
s, H
aver
Ana
lytic
s 0
5/19
/17
Data
are
mon
thly
goi
ng b
ack
to 1
962.
The
PE ra
tio (p
rice-
to-e
arni
ngs
ratio
) is
a m
easu
re o
f the
pric
e pa
id fo
r a s
hare
rela
tive
to th
e an
firm
per
sha
re. I
t is
a fin
anci
al ra
tio u
sed
for v
alua
tion:
a h
ighe
r PE
ratio
mea
ns th
at in
vest
ors
a rso
the
stoc
k is
mor
e ex
pens
ive
com
pare
d to
one
with
low
er P
E ra
tio.
Cons
umer
pric
e in
flatio
n is
the
reta
il pr
ice
incr
ease
as
mea
sure
d by
a C
onsu
mer
Pric
e In
dex
(CP
r G
ear
Reut
ers
05/
19/1
7
fund
amen
tals
may
stil
l poi
nt to
war
d fu
rthe
r gr
owth
in o
utpu
t an
d pr
ofits
.
We
look
for
stoc
ks to
see
gai
ns c
omm
ensu
rate
w
ith p
rofit
gro
wth
, con
sist
ent
with
his
toric
al
mid
-to
-late
eco
nom
ic c
ycle
per
form
ance
. At
19 –
20
times
tra
iling
S&
P 5
00 e
arni
ngs,
sto
cks
are
expe
nsiv
e re
lativ
e to
the
ir lo
ng-t
erm
his
tory
. H
owev
er, w
hen
view
ed a
gain
st in
tere
st r
ates
an
d in
flatio
n st
ill n
ear
hist
oric
low
s [F
igu
re 7
],
valu
atio
ns lo
ok f
air
to u
s. M
oreo
ver,
the
pote
ntia
l po
licy
upsi
de to
ear
ning
s in
201
8 on
top
of a
n al
read
y up
war
d tr
ajec
tory
for
corp
orat
e pr
ofits
co
uld
prov
ide
furt
her
supp
ort
for
equi
ties.
R
emem
ber,
hist
ory
is li
tter
ed w
ith e
xam
ples
sh
owin
g th
at v
alua
tions
hav
e be
en p
oor
pred
icto
rs o
f on
e-ye
ar s
tock
mar
ket
perf
orm
ance
.
Add
ition
al c
larit
y on
cor
pora
te t
ax re
form
in
the
com
ing
mon
ths
will
pro
vide
fur
ther
insi
ght
into
201
8 pr
ofit
grow
th a
nd p
oten
tially
just
ify
elev
ated
sto
ck m
arke
t va
luat
ions
. In
fact
, al
thou
gh w
e ha
ve li
ttle
mor
e th
an a
hig
h-le
vel
fram
ewor
k to
go
on a
s Ju
ne b
egin
s, t
he p
oten
tial
exis
ts fo
r co
rpor
ate
tax
refo
rm to
boo
st S
&P
50
0 ea
rnin
gs b
y 5%
or
mor
e in
201
8, w
ith t
he
obvi
ous
cond
ition
tha
t th
e Tr
ump
adm
inis
trat
ion
dC
tth
k
that
can
get
eno
ugh
Sen
ate.
Far
fro
m a
sm
ore
likel
y th
an n
ot.
Whi
le a
ccel
erat
ing
epr
ovid
e fu
rthe
r su
ppim
plem
entin
g P
resi
dad
ditio
nal F
ed r
ate
hbo
uts
of s
tock
mar
k est
ocks
fro
m a
ddin
g m
gain
s. F
isca
l pol
icy
ism
eani
ngfu
l pro
gres
sof
cor
pora
te t
ax re
fofo
r co
rpor
ate
profi
ts
fund
amen
tal j
ustifi
c a
Inve
stor
s sh
ould
fee
stoc
k m
arke
t is
as
thap
proa
ches
. The
eco
pois
ed to
con
tinue
afu
ndam
enta
ls, t
his
epr
obab
ly c
ontin
ue a
she
lp m
uch
this
yea
r, vo
latil
ity a
s m
onet
ary
but
we
thin
k st
ocks
st
and
on t
heir
own
are
mov
ed a
nd d
eliv
erth
dh
lff
20
dame
ntals
Back
At Th
e Con
trols
%25 20 15 10 5 0 -5 -10
-15
-20
-25
2011
2012
2013
2014
2015
Unite
d St
ates
Earn
ings
Gro
wth
Deve
lope
d In
tern
atio
nal
Emer
ging
Mar
kets
its a
ccom
mod
ativ
e st
ance
. St
rong
er e
arni
ngs
in E
urop
e an
d Ja
pan
have
pow
ered
ear
ning
s gr
owth
for t
he M
SC
I EA
FE
Inde
x so
lidly
hig
her i
n 20
17 a
fter
ea
rnin
gs d
eclin
es in
five
out
of
the
last
six
yea
rs [
Fig
ure
9].
As
has
typi
cally
bee
n th
e ca
se,
emer
ging
mar
ket
econ
omie
s ar
e de
pend
ent
on C
hine
se
dem
and,
yet
giv
en m
assi
ve
inve
stm
ent
acro
ss E
M, f
uele
d in
larg
e pa
rt b
y do
llar-
deno
min
ated
deb
t, t
hey
rem
ain
sens
itive
to
cha
nges
in U
.S. m
onet
ary
polic
y. S
tead
y gl
obal
de
man
d ha
s bo
oste
d ou
tput
for
the
larg
ely
expo
rt-
driv
en e
cono
mie
s an
d dr
iven
rene
wed
ear
ning
s gr
owth
, whi
le f
allin
g co
mm
odity
pric
es c
an h
ave
mix
ed re
sults
for
prod
ucer
s an
d ex
port
ers.
Fort
unat
ely,
thes
e fu
ndam
enta
ls h
ave
been
larg
ely
supp
ortiv
e of
glo
bal e
quiti
es, d
rivin
g w
hat c
an b
e
de In ne is
em m re EA
ou De
glin
vest
men
ts o
utsi
dof
ris
ks t
hat
will
ne
Thes
e in
clud
e a
pogo
vern
men
t, t
he p
in E
urop
e, p
oten
ti ale
avin
g th
e Eu
rope
vuln
erab
ilitie
s in
Ch
geop
oliti
cal u
ncer
taK
orea
and
Syr
ia.
cont
endi
ng w
ith
nce
betw
een
Fund
amen
tals
an
, and
eco
nom
ic
prov
ing
from
low
te
mpt
to
reco
ver
etar
y po
licy
has
omic
and
fina
ncia
l k
supp
ort
cont
inui
ng,
need
ed t
o ad
dres
s re
, we
rem
ain
atio
nal m
arke
ts.
ance
bet
wee
n ar
kets
hav
e a
long
r
ever
sal [
Fig
ure
8].
ts h
ave
offe
red
the
risks
end
emic
as
var
ying
eco
nom
ic
d un
cert
ain
polit
ics.
au
se o
f lim
itatio
ns
olic
y in
Eur
ope,
EM
may
pro
vide
mor
e st
abili
ty, w
hile
pot
entia
l ris
ks
rela
ted
to “
Bre
xit,”
upc
omin
g el
ectio
ns in
Ital
y an
d G
erm
any,
and
str
uctu
ral c
halle
nges
suc
h as
im
mig
ratio
n an
d la
bor
mar
ket
refo
rm m
ay w
eigh
on
dev
elop
ed m
arke
ts.
Pol
itics
and
pol
icy
asid
e, f
unda
men
tals
are
firm
ing
in E
urop
e an
d th
e E
CB
has
giv
en n
o cl
ear
sign
al
rega
rdin
g w
hen
the
inev
itabl
e re
duct
ion
of s
uppo
rt
will
tak
e pl
ace.
Val
uatio
ns a
nd d
ivid
end
yiel
ds
in E
urop
e ap
pear
att
ract
ive
whi
le fi
rmin
g gl
obal
de
man
d, im
prov
ing
earn
ings
, and
the
elim
inat
ion
of t
he w
orst
-cas
e sc
enar
ios
from
the
Fre
nch
and
Dut
ch e
lect
ions
hav
e al
so p
rovi
ded
mar
ket
supp
ort.
The
back
drop
look
s to
be
mor
e fa
vora
ble
for g
loba
l eq
uity
inve
stor
s in
Jap
an, w
here
pol
itica
l lea
ders
hip
was
str
engt
hene
d la
st y
ear.
The
com
bina
tion
of g
over
nmen
t spe
ndin
g, m
onet
ary
polic
y, a
nd
stru
ctur
al re
form
s ap
pear
s to
be
supp
ortiv
e of
eco
nom
ic a
nd p
rofit
gro
wth
, whi
le p
olic
y ta
ilwin
ds re
mai
n in
pla
ce a
s th
e B
OJ
mai
ntai
ns
‘99‘01
‘03‘05
‘07‘09
‘11‘13
‘15‘17
o S&
P 50
0M
SCI E
mer
ging
Mar
kets
Inde
x Re
lativ
e to
S&
P 50
0
Run
s in
Cyc
les
5/19
/17
mar
kets
secu
ritie
sin
volv
essp
ecia
ladd
ition
alris
ks.T
hese
risks
incl
ude,
buta
reno
tlim
ited
to,c
urre
ncy
Earn
ings
Boo
st: N
ot J
ust a
U.S
. Sto
ry9
Sour
ce: L
PL R
esea
rch,
Fac
tSet
05
/19/
17
Earn
ings
fore
cast
s ar
e ba
sed
on T
hom
son
Reut
ers
and
Fact
Set c
onse
nsus
.
Expe
ctat
ions
for
earn
ings
glo
bally
ha
ve in
crea
sed.
M
ore
evid
ence
th
ey w
ill b
e m
et is
re
quire
d fo
r us
to
incr
ease
inve
stm
ent.
RKET
S
ntil R
eady
digi
t re
turn
s fo
r th
e B
loom
berg
B
arcl
ays
Agg
rega
te B
ond
Inde
x. A
t th
at le
vel,
how
ever
, in
tern
atio
nal d
eman
d m
ay
once
aga
in r
etur
n as
val
uatio
ns
wou
ld b
ecom
e ve
ry a
ttra
ctiv
e re
lativ
e to
oth
er s
over
eign
s,
mos
t no
tabl
y to
Jap
anes
e G
over
nmen
t B
onds
(JG
B) a
nd
Ger
man
Bun
ds [
Fig
ure
11]
.
Ris
ks t
o ou
r ra
te c
all i
nclu
de
dela
ys in
pro
-gro
wth
po
licie
s, g
eopo
litic
al r
isk,
and
po
tent
ially
mix
ed m
essa
ges
from
eco
nom
ic d
ata.
As
dem
onst
rate
d ea
rlier
in t
he
year
, del
ays
in p
ro-g
row
th
polic
y co
uld
drag
dow
n lo
nger
-te
rm y
ield
s an
d su
ppor
t U
.S. T
reas
urie
s. G
eopo
litic
al
tens
ions
cou
ld fl
are
up a
t an
y tim
e (e
.g.,
Nor
th K
orea
, S
yria
) and
driv
e de
man
d fo
r
Tre
be an an lea
wo
De
m in
ou fix in
pr du str
as he Alt
be inc
to th div
as b
een
a pr
etty
goo
d fo
r eco
nom
ic a
nd
e se
e lit
tle s
tres
s rk
ets.
Of c
ours
e,
easu
ry p
rices
hav
e he
yie
ld c
urve
pp
roac
h to
tigh
teni
ng.
low
ing
a sh
arp
the
elec
tion,
per
iodi
c op
oliti
cal t
hrea
ts,
on, a
nd a
ttra
ctiv
e er
eign
s, h
ave
kept
er
, the
spr
ead
men
t-gr
ade
corp
orat
e es
, and
the
cost
to
te d
efau
lts h
ave
g th
reat
s [F
igu
re 1
0].
econ
omic
gro
wth
as
e ca
se f
or o
ne t
o n
2017
(m
akin
g tw
o bo
nd p
rices
und
er
such
, we
cont
inue
to f
avor
fixe
d-in
com
e po
sitio
ning
with
neu
tral
to
belo
w-b
ench
mar
k in
tere
st r
ate
sens
itivi
ty. D
espi
te
our
expe
ctat
ion
for
stab
ility
in c
redi
t m
arke
ts,
outp
erfo
rman
ce o
f th
e hi
gh-y
ield
sec
tor
rela
tive
to h
igh
-qua
lity
fixed
inco
me
has
led
to t
ight
sp
read
s ve
rsus
long
-ter
m a
vera
ges,
lim
iting
ret
urn
pote
ntia
l and
war
rant
ing
caut
ion
for
inve
stor
s.
With
litt
le a
dditi
onal
roo
m f
or c
apita
l app
reci
atio
n,
yiel
d is
poi
sed
to b
e th
e do
min
ant
driv
er o
f re
turn
.
Our
vie
w o
n in
tere
st r
ates
rem
ains
unc
hang
ed
from
the
firs
t ha
lf of
201
7. W
e co
ntin
ue t
o be
lieve
th
at t
he c
ombi
natio
n of
gov
ernm
ent
polic
y, c
entr
al
bank
pol
icy,
and
ste
ady
econ
omic
gro
wth
has
th
e po
tent
ial t
o pu
sh t
he 1
0-y
ear
Trea
sury
yie
ld
high
er, a
nd t
hat
our
year
-end
tar
get
of b
etw
een
2.25
% a
nd 2
.75%
rem
ains
rea
sona
ble.
Our
bia
s is
to
war
d th
e up
per
end
of t
he r
ange
, and
we
coul
d se
e th
e 10
-yea
r Tr
easu
ry y
ield
ris
e as
hig
h as
3%
, sho
uld
Con
gres
s m
ake
mea
ning
ful p
rogr
ess
tow
ard
enac
ting
fisca
l stim
ulus
. Sce
nario
ana
lysi
s ba
sed
on t
his
pote
ntia
l int
eres
t ra
te r
ange
and
the
du
ratio
n of
the
inde
x in
dica
tes
low
- to
mid
-sin
gle
-
2015
2016
2017
te S
prea
d Hi
gh-Y
ield
Spr
ead
%3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5
-1.0
‘07‘08
‘09‘10
‘11‘12
‘13‘14
10-Y
ear T
reas
ury
Yiel
d Ad
vant
age
to B
und
10-Y
ear T
reas
ury
Yiel
d Ad
vant
age
to
g C
onfi
denc
e in
Cre
dit M
arke
ts, b
ut E
xpen
sive
Val
uati
ons
05/
19/1
7
berg
Bar
clay
s U.
S. C
orpo
rate
Bon
d In
dex.
Opt
ion
adju
sted
spr
ead
for B
loom
berg
Bar
clay
s U.
S. C
orpo
rate
Hig
h
ble
mat
urity
Trea
surie
s
Trea
suri
es S
till
Sho
win
g P
ower
Rel
ativ
e to
Ger
man
Bun
d an
d JG
B11
Sour
ce: L
PL R
esea
rch,
Blo
ombe
rg
05/1
9/17
Inve
stin
g in
fore
ign
and
emer
ging
mar
kets
deb
t sec
uriti
es in
volv
es s
peci
al a
dditi
onal
risk
s. T
hese
ris
curre
ncy
risk,
geo
polit
ical
and
regu
lato
ry ri
sk, a
nd ri
sk a
ssoc
iate
d w
ith v
aryi
ng s
ettle
men
t sta
ndar
ds.
We
cont
inue
to
belie
ve th
at th
e co
mbi
natio
n of
go
vern
men
t pol
icy,
ce
ntra
l ban
k po
licy,
and
ste
ady
econ
omic
gro
wth
ha
s th
e po
tent
ial
to p
ush
the
10-
year
Tre
asur
y yi
eld
high
er, a
nd
that
our
yea
r-en
d ta
rget
of b
etw
een
2.25
% a
nd 2
.75%
re
mai
ns re
ason
able
.
To Ov
erloa
d
he
gro
wth
en
gin
e fo
r th
e U
.S. e
con
om
y an
d m
arke
ts is
ar
y p
olic
y is
po
wer
ing
do
wn
, bu
sin
ess
fun
dam
enta
ls
and
fisc
al p
olic
y an
d e
con
om
ic g
row
th a
re o
n t
he
ken
off
sta
nd
by.
Th
e Fe
d h
as s
ho
wn
incr
easi
ng
n
om
y h
as r
eco
vere
d a
nd
th
at m
arke
t fo
rces
can
n
seq
uen
tly,
we
loo
k fo
r fi
scal
po
licy
to s
up
ple
men
t as
th
e m
arke
t’s
nex
t d
rive
rs. I
n g
ener
al, c
on
sum
ers
eel p
rett
y g
oo
d a
bo
ut
eco
no
mic
co
nd
itio
ns.
Co
nsu
mer
fi
den
ce is
hig
h, l
ikel
y p
rovi
din
g t
he
nex
t b
oo
st t
o
inve
stm
ent.
full
tran
sfer
aw
ay f
rom
mo
net
ary
po
licy
hav
e d
ent
in h
ead
lines
in t
he
med
ia a
bo
ut
ho
w t
he
Tru
mp
ag
end
a m
ay b
e in
dan
ger
. Sto
ck m
arke
t le
ader
ship
has
t
ho
se a
reas
of
the
mar
ket
bes
t p
osi
tio
ned
to
ben
efit
d fi
scal
po
licie
s. T
he
late
st s
tall
cou
ld p
ush
th
e ke
y s
into
201
8, o
r p
oss
ibly
der
ail t
hem
. Th
e o
dd
s st
ill
ax r
efo
rm b
ein
g a
chie
ved
, wh
ile p
rosp
ects
fo
r th
e re
st
y b
eco
me
ten
uo
us.
inve
sto
rs t
o a
pp
reci
ate
the
imp
licat
ion
s o
f a
dri
ver.
Mu
ch li
ke a
po
rtfo
lio c
an b
enefi
t fr
om
e
eco
no
my
and
mar
kets
can
ben
efit
fro
m d
iffe
ren
t t
dif
fere
nt
tim
es. A
s m
on
etar
y p
olic
y p
ow
ers
do
wn
, en
tals
po
wer
up
, an
d w
e w
ait
for
fisc
al p
olic
y to
hel
p
om
y o
ff o
f st
and
by
mo
de,
we
ho
pe
LPL
Res
earc
h’s
A
Sh
ift
In M
arke
t C
on
tro
l will
en
able
yo
u t
o id
enti
fy
t m
ay a
rise
, nav
igat
e th
e ch
alle
ng
es t
hat
will
an
d h
elp
yo
u s
tick
to
yo
ur
lon
g-t
erm
inve
stin
g p
lan
.
IMPO
RTA
NT
DIS
CLO
SURE
S
The
opin
ions
voi
ced
in th
is m
ater
ial a
re fo
r gen
eral
info
rmat
ion
only
and
are
not
inte
nded
to p
rovi
de o
rsp
ecifi
c in
vest
men
t adv
ice
or re
com
men
datio
ns fo
r any
indi
vidu
al s
ecur
ity. T
o de
term
ine
whi
ch in
vest
myo
u, c
onsu
lt yo
ur fi
nanc
ial a
dvis
or p
rior t
o in
vest
ing.
All
perfo
rman
ce re
fere
nced
is h
isto
rical
and
is n
o Al
l ind
exes
are
unm
anag
ed a
nd c
anno
t be
inve
sted
into
dire
ctly.
Econ
omic
fore
cast
s se
t for
th m
ay n
ot d
evel
op a
s pr
edic
ted,
and
ther
e ca
n be
no
guar
ante
e th
at s
trat
succ
essf
ul.
Inve
stin
g in
sto
ck in
clud
es n
umer
ous
spec
ific
risks
incl
udin
g: th
e flu
ctua
tion
of d
ivid
end,
loss
of p
rinof
the
inve
stm
ent i
n a
falli
ng m
arke
t.
Ther
e is
no
guar
ante
e th
at a
div
ersi
fied
portf
olio
will
enh
ance
ove
rall
retu
rns
or o
utpe
rform
a n
on-d
iDi
vers
ifica
tion
does
not
ens
ure
agai
nst m
arke
t ris
k.
Bond
s ar
e su
bjec
t to
mar
ket a
nd in
tere
st ra
te ri
sk if
sol
d pr
ior t
o m
atur
ity. B
ond
and
bond
mut
ual f
unde
clin
e as
inte
rest
rate
s ris
e an
d bo
nds
are
subj
ect t
o av
aila
bilit
y an
d ch
ange
in p
rice.
Gove
rnm
ent b
onds
and
Tre
asur
y bi
lls a
re g
uara
ntee
d by
the
U.S.
gov
ernm
ent a
s to
the
timel
y pa
yme
inte
rest
and
, if h
eld
to m
atur
ity, o
ffer a
fixe
d ra
te o
f ret
urn
and
fixed
prin
cipa
l val
ue. H
owev
er, t
he v
agu
aran
teed
and
will
fluc
tuat
e.
Mor
tgag
e-ba
cked
sec
uriti
es a
re s
ubje
ct to
cre
dit,
defa
ult,
prep
aym
ent r
isk
that
act
s m
uch
like
call
r ipr
inci
pal b
ack
soon
er th
an th
e st
ated
mat
urity
, ext
ensi
on ri
sk, t
he o
ppos
ite o
f pre
paym
ent r
isk,
mar
k
Bank
loan
s ar
e lo
ans
issu
ed b
y be
low
inve
stm
ent-g
rade
com
pani
es fo
r sho
rt-te
rm fu
ndin
g pu
rpos
es w
ite
rm d
ebt a
nd in
volv
e ris
k.
Inve
stin
g in
MLP
s in
volv
es a
dditi
onal
risk
s as
com
pare
d w
ith th
e ris
ks o
f inv
estin
g in
com
mon
sto
ckca
sh fl
ow, d
ilutio
n, a
nd v
otin
g rig
hts.
MLP
s m
ay tr
ade
less
freq
uent
ly th
an la
rger
com
pani
es d
ue to
tw
hich
may
resu
lt in
erra
tic p
rice
mov
emen
t or d
ifficu
lty in
buy
ing
or s
ellin
g. M
LPs
are
subj
ect t
o si
gnbe
adv
erse
ly a
ffect
ed b
y ch
ange
s in
the
regu
lato
ry e
nviro
nmen
t, in
clud
ing
the
risk
that
an
MLP
cou
ldpa
rtner
ship
. Add
ition
al m
anag
emen
t fee
s an
d ot
her e
xpen
ses
are
asso
ciat
ed w
ith in
vest
ing
in M
LP
IND
EX D
EFIN
ITIO
NS
The
U.S.
Dol
lar I
ndex
(DXY
) ind
icat
es th
e ge
nera
l int
erna
tiona
l val
ue o
f the
U.S
. dol
lar.
The
DXY
Ind e
the
exch
ange
rate
s be
twee
n th
e U.
S. d
olla
r and
six
maj
or w
orld
cur
renc
ies.
The
S&P
500
Inde
x is
a c
apita
lizat
ion-
wei
ghte
d in
dex
of 5
00 s
tock
s de
sign
ed to
mea
sure
per
form
anec
onom
y th
roug
h ch
ange
s in
the
aggr
egat
e m
arke
t val
ue o
f 500
sto
cks
repr
esen
ting
all m
ajor
indu
s t
The
Bloo
mbe
rg B
arcl
ays
U.S.
Agg
rega
te B
ond
Inde
x is
a b
road
-bas
ed fl
agsh
ip b
ench
mar
k th
at m
eas
U.S.
dol
lar-d
enom
inat
ed, fi
xed-
rate
taxa
ble
bond
mar
ket.
The
inde
x in
clud
es T
reas
urie
s, g
over
nmen
tse
curit
ies,
MBS
(age
ncy
fixed
-rate
and
hyb
rid A
RM p
ass-
thro
ughs
), AB
S, a
nd C
MBS
(age
ncy
and
no
The
Bloo
mbe
rg B
arcl
ays
U.S.
Cor
pora
te B
ond
Inde
x m
easu
res
the
inve
stm
ent g
rade
, fixe
d-ra
te, t
axa
It in
clud
es U
.S. d
olla
r-den
omin
ated
sec
uriti
es p
ublic
ly is
sued
by
U.S.
and
non
-U.S
. ind
ustri
al, u
tility
The
Bloo
mbe
rg B
arcl
ays
U.S.
Cor
pora
te H
igh
Yiel
d Bo
nd In
dex
mea
sure
s th
e U.
S. d
olla
r-den
omin
ate
corp
orat
e bo
nd m
arke
t. Se
curit
ies
are
clas
sifie
d as
hig
h yi
eld
if th
e m
iddl
e ra
ting
of M
oody
’s, F
itch
abe
low
. Bon
ds fr
om is
suer
s w
ith a
n em
ergi
ng m
arke
ts c
ount
ry o
f ris
k, b
ased
on
Barc
lays
EM
cou
ntry
The
MSC
I Em
ergi
ng M
arke
ts In
dex
is a
free
floa
t-adj
uste
d, m
arke
t cap
italiz
atio
n in
dex
that
is d
esig
nm
arke
t per
form
ance
of e
mer
ging
mar
kets
.
The
MSC
I EAF
E In
dex
is a
free
floa
t-adj
uste
d, m
arke
t-cap
italiz
atio
n in
dex
that
is d
esig
ned
to m
easu
perfo
rman
ce o
f dev
elop
ed m
arke
ts, e
xclu
ding
the
Unite
d St
ates
and
Can
ada.
To Ef
ficien
cy
RES 5106 0617Tracking #1-615392 (Exp. 06/18)
This research material has been prepared by LPL Financial LLC.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an
affiliate of and makes no representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit
Member FINRA/SIPC
