1. 2017 Outlook For the Financial Markets
May 4, 2017
Scott Colbert, CFA
Executive Vice President
Chief Economist – Director of Fixed Income

2. Economic Output – Where In the World Does It Come From?
Percentage Contribution to World GDP
Source: International Monetary Fund

3. Economic Output – Where in the World Will It Come From?
Source: International Monetary Fund

4. U.S. Real GDP (2% is the new 3%)
Source: Bloomberg, Bureau of Economic Analysis

5. U.S. Total Domestic Debt vs. GDP
Indicates Recession
Source: Flow of Funds Accounts, Federal Reserve

6. China: Developing Country with Advanced Leverage
Source: McKinsey Global Institute, Debt and (Not Much) Deleveraging, February 2015

7. Long Term Drivers of U.S. Economic Growth
Source: JP Morgan, Bureau of Labor Statistics

8. Total U.S. Auto Sales - Recovered
Source: Bloomberg

9. New Housing Starts
Source: Bloomberg

10. Corporate Credit Spreads (Relative to Treasury Bonds)
Source: Bloomberg, Barclays

11. Employment – Steady and Better Than It Feels
Source: Bureau of Labor Statistics

12. The Falling Labor Participation Rate
Source: Bureau of Labor Statistics

13. Unemployment Falling While Wages Rise
Source: Bureau of Labor Statistics

14. Inflation – Benign but Turning Up
Source: Bloomberg

15. 3 Prior Fed Hikes vs. Current FOMC vs. Market Expectations
Source: Bloomberg, BofA/Merrill Lynch

16. You Think Our Rates Are Low?
Source: Bloomberg

17. 10-Year Government Bond Yields: U.S. vs. G7
Source: Bloomberg

18. 2017 YTD Index Returns

19. Index Returns After the Election – 11/8/2016 to 03/31/2017

20. S&P 500 P/E and Inflation Ratio

21. Stock Returns vs. Consumer Confidence

23. Domestic, International Developed & Emerging Market Cumulative Returns – 12/31/2012 to 03/31/2017

24. U.S. Dollar Index
Source: Bloomberg

25. Domestic Versus International Equity Returns
S&P 500 vs. EAFE
Log Scale as of 03/31/2017

26. Impact of Interest Rate Changes on a Portfolio

27. Housing and Stocks vs. GDP (Expensive)