1. IASA Northeastern Annual Regional Conference Economic and Capital Markets Overview
November 2018
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2. Agenda Overview of U.S. Economic Conditions Trade War with China
Conclusions
Food for Thought – The Rise and Fall of Bitcoin

3. Nominal and Real GDP Growth (YoY%)
U.S. GDP Growth
Nominal and Real GDP Growth (YoY%)
Last = Q3 2018
Source: BEA, Haver, NEAM

4. Corporate Profit Margins are Strong
Last = June 2018
Source: BEA, Haver, NEAM

5. Consumer Sentiment Indicators
Consumer Confidence
Consumer Sentiment Indicators
Consumer Confidence
Source: CB, University of Michigan, NBER, Haver, NEAM
Last = Oct 2018

6. Prices May Be Starting to Stunt Home Sales
Existing Home Sales and Housing Prices

7. Housing Affordability Index
NAR Housing Affordability Index: Composite
Last = Aug 2018
Source: National Association of Realtors, Haver

8. Homebuilders vs. the S&P 500
SPX vs. Homebuilders ETF
SPX vs. Homebuilders ETF
Source: Bloomberg, NEAM

9. Fed Funds Rate and Projections
Source: FRB, NBER, Haver, NEAM

10. I’ll see your tariffs and raise you…
Trade War
I’ll see your tariffs and raise you…

11. Global Tariff Rates Russia 3.6% Canada 1.6% US 1.7% China 3.5% Mexico
4.4%
India
6.3%
Brazil
8.0%
Source: World Bank, Haver, NEAM. As of Represents weighted average tariff across all products

12. U.S., China and EM Equity Indices
Source: Bloomberg, NEAM

13. Foreign Holders of U.S. Treasury Debt
Percent of Foreign Holdings of U.S. Treasuries
Last = June 2018
Source: US Treasury, Haver, NEAM

14. Conclusions The U.S. economy still very strong
We continue to believe that the fiscal stimulus courtesy of tax law changes will be greatest in 2018 and into early 2019
The trade dispute continues with China and will likely be a headwind for future growth
Federal reserve tightening policy will continue into 2019
Expect the economic inflection point to occur between

15. The Rise and Fall of Bitcoin
$330 billion Market Capitalization
$110 billion Market Capitalization
Source: NEAM, Morgan Stanley

16. ICO (Initial Coin Offerings) Ran Rampant
Source: NEAM, Morgan Stanley

17. Takeaways from the Bitcoin Experiment
Failed: Replacing cash payment system
Succeeded: Store of value for depreciating currencies
To be determined: New institutional asset class for investment

18. Thank You
Nico Santini, CFA