WHY ARE 2011 PENNIES WORTH MORE THAN 2010 PENNIES? WHILE YOU ARE WAITING WHY ARE 2011 PENNIES WORTH MORE THAN 2010 PENNIES? BECAUSE 2011 IS MORE THAN 2010!

PUNCTUATION MATTERS

BIGFOOT INVESTMENTS - OPEN FORUM Jul 27, 2017 WELCOME!

AGENDA WELCOME! ADMIN NOTES QUOTE OF THE DAY SWAPS AND SPREADS OPTIMISM GAUGE DIAGNOSTICS GAGE FED TRACKER SUM AND SUBSTANCE WEEKLY INTELLIGENCE HIGH IMPACT - RISK GLOBAL PERSPECTIVE DAVID’S CORNER ADVISOR INPUT QUESTIONS/COMMENTS

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Screening/Scoring for Aug 2017 ACTION POSTING DATES Stock Screen 7/28/2017 (Mid-Day) Stock Scoring Normal – Friday 7/28/2017 Portfolio Note British American Tobacco (BTI) has purchased RAI: $29.44 in cash for each share of RAI Plus .526 shares of BTI for each share of RAI

“QUOTE” OF THE DAY: Ninety percent of the politicians…. …..give the other 10 percent a bad name. Henry Kissinger

Optimism Gauge As of: 7/27/2017

>50-day MA/>100-Day MA Change Measuring Our Economy Last Update: 7/27/2017 Weekly Updates New Monthly Updates Indicator Current Value Prior/Metric Value St Louis Fed Financial Stress Index - 1.595 - 1.504 (Rev) +1.0 Chicago Fed National Act Index (3 Mon M/A) +0.06 -0.04 (Rev) +.50 Unemployment 4.4% (May) 4.3% (Apr) +2.00 Weekly Jobless Claims (4Wk Mov Av) 244,000 244,000 (Rev) ECRI Weekly Index (Against 52 Wk Av) 144.8 143.9 Conf Board Leading Indicators (NEW) 127.8 127.0 (Rev) University of Michigan Sentiment – Final 95.1 (Final – Jun 2017) 97.1 (Final – May 2017) Monthly Retail Sales – ex Autos (Adjusted) 375,627 (Jun -2017) 376,437 (May-2017) Rev -.50 NFIB Small Business Sentiment 103.6 (Jun -2017) 104.5 (May -2017) ISM Manufacturing 57.8 (Expansion Line = 50) 54.9 Economic Capacity Utilization 76.6% 76.7% (Rev) Stock Market Moving Averages Weekly Data Points >50-day MA/>100-Day MA N/A S&P Case-Shiller 20 City Comp Index (YoY) 5.7% (May) 5.6% (Apr)

Economic Optimism Index Measuring our Economy 10 20 30 40 50 60 70 80 90 100 Economic Optimism Index Current: Prior: 90.74% READING AS OF: 7/27/2017 Current Reading: 90.74% Trend: Positive Prior Reading: 90.57% (Rev) Bias: Positive

BENIGN

Week of: Jun 24th, 2017 BigFoot Investments Market Diagnostics Week of: Jun 24th, 2017 BigFoot Investments

SENTIMENT INDICATORS Week of Jul 24th - 2017 1. AAII Investor Survey 2. TSP Sentiment Survey 3. NAAIM Survey of Manager Sentiment 4. CBOE Volatility Index INTERNAL INDICATORS 5. S&P500 - 50D MA and 200D MA AND 2/10 MA 6. NYSE Bullish % 7. S&P 500 Bullish % ($BPSPX) 8. Percent of NYSE stocks above 200DMA 9. Percent of NYSE stocks above 10WMA or 50DMA ($NYA50R) 10. NYSE 52-Week New Highs and New Lows 11. Percent of S&P500 stocks above 200DMA 12. Percent of S&P500 stocks above 50DMA ADDED INDICATORS 13. Option Sentiment 14. Option Buyers Sentiment Gauge (OBSG) 15. Consumer Sentiment Index 16. Nasdaq Sentiment Index 17. Rydex Nova/Ursa Sentiment Indicator

Week of Jul 24th, 2017 29.41% Prior: 17.64%

ONLY ONE SPEAKS Labor market continued to strengthen VOTING MEMBER MEMBER DISTRICT TOPIC LINK TO SOURCE Yellen Chair FOMC Statement Labor market continued to strengthen Economic activity rising moderately Job gains solid Household spending and business fixed investment continue to expand Overall inflation running below 2% annualized and expected to remain somewhat below 2% in the near term But should stabilize near 2% objective in medium term Near-term risks to economic outlook appear roughly balanced but Committee monitoring inflation closely Committee expects economic conditions will evolve in such a manner that will warrant gradual increases in FDFD For the time being, Committee will maintain existing policy of reinvesting principal payments from Agency debt and rolling over maturing Treasury securities But expects to begin implementing its balance sheet normalization relatively soon

DWINDLING Now: 43.7% Previous: 48.4% http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html Source: CME; Federal Reserve

Credit Anticipates-Equity Confirms Swaps and Spreads Rate Prior Current Status* Libor/OIS 0.14 0.16   Euribor/Eonia -0.028 -0.033 Markit CDX NA - IG Spread 57.45 56.30 Markit CDX NA- HY Index 107.55 107.67 DTCC Repo - MBS 1.106 1.143 DTCC Repo – Treasury 1.071 1.101 High Yield 3.69 3.55 Fed Reserve Currency Swaps-Short 55 (ECB) 0 (BOJ) 40 (ECB) 1 (BOJ) Fed Reserve Currency Swaps-Long 2-Year Swap Spread 0.228 0.274 TED Spread 0.190 0.197 As of: 7/26/2017 COB *Note: Status = No major impact Status = Moving Worse Status = Negative Impact

EARNINGS UPDATE Source: JP Morgan

73% are reporting EPS above 5 year average Q2 HOLDING STRONG NOTES: 19% reported as of 7/21/2017 73% are reporting EPS above 5 year average 77% reporting sales above 5 year average At this point blended earnings growth is 7.2% Blended sales growth is 5.0% 191 companies reporting this week Only 7 companies have issued negative guidance Forward P/E is 17.8 (5-year average 15.4/10-year 14.0) For Q3 analysts projecting earnings growth 6.45% and revenue growth of 5.0% For Q4 2017, analysts are projecting earnings growth of 11.7% and revenue growth of 5.0% The bottom up target price for the NTM 7.7% (2663.48) Source: FactSet

PORTFOLIO CONSTRUCTION - AQR Source: AQR

SUM SUBSTANCE

WEEKLY INTELLIGENCE Leading Indicators Manufacturing Services Housing Growth Outlook Trade

WEEKLY MACRO DATA STILL GOOD

CONTINUED GROWTH THROUGH 2017 Source: Conference Board

FURTHER ACCELERATION IN BUSINESS ACTIVITY GROWTH ACROSS THE U.S. Source: Markit

TREND HOLDING FOR NOW Source: Census Bureau

All cities reported increases (nsa) THE BEAT GOES ON All cities reported increases (nsa)

GOOD NUMBERS UP 0.8% m/m Up 9.1% y/y Aver: 5.1 Median Sales Price: $310,800 Sales Inventory: 5.4 months Aver: 5.1

UPWARD MOVEMENT LITTLE INFLATION NO RECESSION Source:

NEAR AND FAR????? Source: Cleveland Fed

MUCH BETTER…BUT SLOWER AT THE CORE AND SLOW CAPEX Source: Census Bureau

HOLD YOUR BREATH 2.8% Source: New York Fed; Atlanta Fed; Goldman Sachs

SOME IMBALANCES EVIDENT

INTELLIGENCE RISK FACTORS Fed Market Factors Asset Credit For Better or Worse?

SANS THE “FOOD” INTERESTING TAKE Source: Danske Bank Research

HOUSEHOLDS AND INSTITUTIONS NOT “PLAYING”

ASSETS OUTSTRIP INCOME – CAUTIOUS SITUATION

MANUFACTURING ISSUES Source: WSJ

LENDING DECLINING DESPITE EASIER CREDIT? Source: Federal Reserve SLOS

DEBT TO LIVE OR DIE BY Source: Moody’s Investors’ Service

BUT….SOME CHANGES IN THE WIND?????

TOO MUCH PEACE? Source: Bloomberg

OVERALL: DATA POINTS STATUS Comments Manufacturing Services Housing Holding Services Same Housing Remains strong Growth Real or perceived? Durable Goods Weaker Trade Holding in U.S. favor due to weak dollar Sentiment Strenghtening

Eurozone Japan CRITERIA SCORE Deficient 0-1 Poor 2-4 Satisfactory 5-7 Good 8-9 Excellent 10

THOUGHTS FOR THE FUTURE

ECB SHOULD BE IN NO RUSH TO TAPER POLICY 8.0 EUROZONE’S RECENT GROWTH SPURT LOST MOMENTUM FOR A SECOND SUCCESSIVE MONTH, BUT STILL REMAINED IMPRESSIVE. ECB SHOULD BE IN NO RUSH TO TAPER POLICY Composite: 55.8 Services: 55.4 Source: Markit

STAGNATION IN EXPORT ORDERS 7.5 SLOWDOWN WAS DRIVEN BY STAGNATION IN EXPORT ORDERS Source: Markit

A PHILLIPS CURVE GONE BAD – DRAGHI BLINKS Source:

0.225 U.S. Macro 0.075 Last New

DAVID’S CORNER

ADVISOR INPUTS

QUESTIONS & COMMENTS THANKS FOR JOINING US!

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WHAT WE WOULD BUY AT THIS LEVEL REASON STRATEGY THOUGHTS