Economic Outlook: Finance, Housing and the Consumer Federal Reserve Bank of Chicago Annual Economic Outlook Symposium

Transcription

1 Economic Outlook: Finance, Housing and the Consumer Federal Reserve Bank of Chicago Annual Economic Outlook Symposium John E. Silvia, Chief Economist Friday, December 2, 211 Where Are We Now? Inflation Interest Rates Five benchmarks for good decision making Growth Profits The Dollar Source: 2

2 What We Get Versus What We Expect Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDPR - CAGR: 2. GDPR - Yr/Yr Percent Change: 1.5% Forecast Sustained recovery in 212, but still below historical experience Source: U.S. Department of Commerce and Securities, LLC 3 Consumers: Better Returns, Fewer Players

3 Consumer Spending 8. Real Personal Consumption Expenditures Bars = CAGR Line = Yr/Yr Percent Change Forecast 4. Subpar recovery suggests deleveraging consumer, cautious credit and slow job gains PCE - CAGR: 2.3% PCE - Yr/Yr Percent Change: 2.2% Source: U.S. Department of Commerce and Securities, LLC 5 Employment Cycle Cycle Cycle 21 Cycle 27-To-Date Forecast Employment Cycles Percent Change from Cycle Peak Employment will eventually regain its peak, but not quickly Source: U.S. Department of Labor and Securities, LLC 6

4 Household Wealth Wealth has rebounded since the recession, driven by gains in financial markets Total Composition $7 Household Net Worth Trillions of Dollars $7 $8 Household Assets Trillions of Dollars Financial Assets: $49.4 Trillion $8 $6 $6 $7 Household Real Estate Holdings: $16.2 Trillion Other Tangible Assets: $7. Trillion $7 $5 $5 $6 $6 $5 $5 $4 $4 $4 $4 $3 $3 $3 $3 $2 $2 $2 $2 $1 $1 $1 $1 Net Worth: $58.7 Trillion $ $ $ $ Source: Federal Reserve Board and Securities, LLC 7 Household Finances 13 Household Debt - Consumer & Mortgage As a Percent of Disposable Personal Income Consumers are reducing their debt, but leverage remains historically high Household Debt: 16.5% Source: Federal Reserve Board and Securities, LLC 8

5 Household Finances: Current Income 14. Household Debt Service Ratio As a Percent of Disposable Personal Income % 13.5% Debt service has returned to more sustainable rates 12.5% % 12.5% % % DSR: 11.1% % 1. Source: Federal Reserve Board and Securities, LLC 9 Household Finances Personal Saving Rate Disp. Personal Income Less Spending as a % of Disp. Income 15% 15% 12% 12% Consumers are saving at higher rates after the last economic shock 9% 6% 9% 6% 3% 3% Personal Saving Rate, 12-Month M.A.: 4.6% Source: U.S. Department of Commerce and Securities, LLC 1

6 Consumers Confidence improves with income, as does consumption Confidence Consumption 16 Consumer Confidence by Household Income 1985=1; 3-Month Moving Averages 16 45% Distribution of Consumption By Income Quintile % % 35% % 25% % 15% 4 2 Under $15,: 37.4 $15,-$24,999: 36.5 $25,-$34,999: 37.8 $35,-$49,999: 44.4 $5, and Over: % Lowest 2 percent Second 2 percent Third 2 percent Fourth 2 percent Highest 2 percent 1 5% Source: The Conference Board, U.S Department of Labor and Securities, LLC 11 Consumer Credit 35% 3 25% 2 Consumer Credit Year-over-Year Percent Change, 3-Month Moving Average Nonrevolving Credit: 4.8% Revolving Credit: -2.7% 35% 3 25% 2 Consumer borrowing has seen a slight pickup, driven by auto and student loans 15% 1 5% -5% -1 15% 1 5% -5% -1-15% -15% Source: Federal Reserve Board and Securities, LLC 12

7 Income: Rising Returns to Education $8 $ Income By Education Level 27 Dollars Before Taxes, Thousands $8 $7 $6 $6 Real income has remained relatively flat over the last decade, except for those with a college degree $5 $4 $3 $5 $4 $3 $2 $2 $1 $1 $ No H.S. H.S. Diploma Some College College Degree $ Source: Federal Reserve Board and Securities, LLC 13 Personal Income 12. Real Disposable Personal Income Bars = CAGR Line = Yr/Yr Percent Change Forecast Rising inflation is cutting into consumers income Real Disp. Personal Inc. - CAGR: -2.1% Real Disp. Personal Inc. - Yr/Yr Percent Change: Source: U.S. Department of Commerce and Securities, LLC 14

8 Housing: Poor Returns, Fewer Players Housing 2.4 Housing Starts Millions of Units Structural Challenge: What is the new sustainable pace? Below 1.5 million? Forecast Source: U.S. Department of Commerce and Securities, LLC 16

9 Housing Home improvements now account for the largest share of residential investment in the economy Residential Investment Q3-26 Brokers' Other Commissions.9% 13.5% Residential Investment Q3-211 Other Brokers'.1% Commissions 16.9% New Building 36.9% Improvements 23.9% New Building 61.6% Improvements 46.2% Source: U.S Department of Commerce and Securities, LLC 17 Housing Demographics 24 Median Home Size vs. Average Household Size Square Feet; Number of Persons Secular Shift? Households are living in smaller homes with more people since the recession Median Square Footage: 2,168 (Left Axis) Number of Persons per Household: 2.59 (Right Axis) Source: U.S. Department of Commerce and Securities, LLC 18

10 Housing Negative equity in homes has contributed to foreclosures and reduced labor mobility Oregon Washington New Hampshire Colorado Utah Rhode Island Illinois Ohio Idaho Virginia Maryland Georgia California Michigan Florida Arizona Nevada Negative Equity Mortgages - By State Percent of Mortgages Outstanding 17.2% 17.2% % 2.9% 21.5% 21.7% 22.3% % 23.6% 3.2% 3.2% 35.6% 45.1% As of Q % 6.4% US 22.7% Source: CoreLogic and Securities, LLC 19 Housing Delinquencies and inventories have come down somewhat from their all-time peaks, but still remain elevated Delinquencies Inventory 11. Mortgage Delinquency Percent of Loans Past Due, Seasonally Adjusted 11. 5, Inventory of Existing Homes for Sale Existing Homes for Sale at End of Month, In Thousands 5, ,5 4, , 4, ,5 3, , 3, ,5 2, , 2, All Loans: 8. Total Inventory: 3, ,5 1, Source: Mortgage Bankers Association, National Association of Realtors and Securities, LLC 2

11 Home Prices: Temporary Actions Do Not Provide Permanent Change Timing of Recovery Will Vary Across Metro Areas S&P/Case-Shiller Home Price Index September Yr/Yr % Change 3-Month Annual Rate Charlotte -2.55% -3.45% Dallas % Los Angeles San Francisco -5.91% -9.64% New York City -2.63% 2.37% Washington, DC.91% 6.95% The steepest declines are behind us, but recovery will be slow in areas with excess supply Historical Perspective Historical Perspective S&P Case-Shiller Home Prices Percent Decline from Local Market Peak S&P Case-Shiller Composite-2 Home Price Index Year-over-Year Percentage Change Dallas Denver Boston Charlotte Cleveland New York City Washington Portland Seattle Atlanta Chicago Minneapolis San Diego Los Angeles San Francisco Detroit Tampa Miami Phoenix Las Vegas 7.9% 1.6% 15.4% 17.3% 18.6% 21.3% 25.1% % 29.7% 29.7% % 38.7% % 46.5% 5.2% 55.9% 6. 24% 2 16% 12% 8% 4% -4% -8% -12% -16% 24% 2 16% 12% 8% 4% -4% -8% -12% -16% C % C % 5% 1 15% 2 25% 3 35% 4 45% 5 55% 6 65% 7-2 S&P Case-Shiller Composite-2: -3.6% -24% % Source: S&P Case-Shiller and Securities, LLC 21 Home Prices S&P Case-Shiller Home Price Index P/E Ratio January 1987=1 S&P Case-Shiller P/E Ratio: 1.16 S&P Case-Shiller C-1 Home Price Index Divided by CPI Owners' Equivalent Rent The cost of ownership versus renting has returned to more sustainable levels Source: S&P Case-Shiller, U.S. Department of Labor and Securities, LLC 22

12 Housing Median New Minus Existing Sale Price In Thousands, Single-Family $6 $6 12-Month Moving Average: $59,17 $5 Average From 1997 to 26 = $18,75 $5 Falling prices of existing homes make them more attractive to new construction $4 $3 $4 $3 $2 $2 $ $1 Source: U.S. Department of Commerce, National Association of Realtors and Securities, LLC 23 Commercial Real Estate Architectural Billings vs. Construction Spending Index, Year-over-Year Percent Change, Seasonally Adjusted Typical Cyclical Pattern: Commercial and industrial billings has gained momentum due to increased activity in the manufacturing sector Arch. Billings Index: 49.4 (Left Axis) Private Construction: 3.9% (Right Axis) Source: The American Institute of Architects, U.S. Department of Commerce and Securities, LLC 24

13 Commercial Real Estate 1.6% Apartment Effective Rent Growth Quarter-over-Quarter Percent Change 1.6% 1.2% 1.2%.8%.8%.4%.4% The apartment market is firming. -.4%. -.4% -.8% -.8% -1.2% Apartment Effective Rent Growth: -1.6% % -1.6% Source: Reis, Inc. and Securities, LLC 25 Commercial Real Estate 24% 2 Commercial Real Estate Vacancy Rates Percent Office Vacancy Rate: 17.4% Industrial Vacancy Rate: 11.3% Retail Vacancy Rate: 11. Apartment Vacancy Rate: 5.6% 24% 2 16% 16% Improvement in the commercial real estate market remains uneven across product categories 12% 8% 12% 8% 4% 4% Source: Reis, Inc., PPR and Securities, LLC 26

14 Financial: i Weaker Returns, Many Players Inflation 9% U.S. Consumer Price Index Both Series are 3-Month Moving Averages 9% 6% 6% 3% 3% Consumer prices are beginning to pick up on the heels of higher food and housing prices -3% -6% -3% -6% -9% CPI 3-Month Annual Rate: 3.3% CPI Year-over-Year: 3.7% -12% % -12% Source: U.S. Department of Labor and Securities, LLC 28

15 Interest Rates Risk is rising Long-Term View Recent History 4 3-Month LIBOR-OIS Spread Basis Points Month LIBOR-OIS Spread Basis Points U.S. 3-Month LIBOR-OIS Spread: 4 Bps Euro 3-Month LIBOR-OIS Spread: 93 Bps 35 1 U.S. 3-Month LIBOR-OIS Spread: 43 Bps Euro 3-Month LIBOR-OIS Spread: 1 Bps Jan-8 Jan-9 Jan-1 Jan-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Oct-11 Nov-11 Source: Bloomberg LP and Securities, LLC 29 Interest Rates.55%.5 LIBOR & Greek Bond Yields 3-Month LIBOR; 1-Year Greek Government Bond U.S Debt Ceiling Announcement 35% 3.45% 25% The European sovereign debt crisis is fueling the rise in LIBOR rates.4.35% % 1 25%.25% 3-Month Libor: (Left Axis) Greece: 28.9% (Right Axis).2 Jan-1 Apr-1 Jul-1 Oct-1 Dec-1 Apr-11 Jul-11 Sep-11 5% Source: IHS Global Insight and Securities, LLC 3

16 Corporate Spreads: Positive for Issuance 7 6 Aaa and Baa Corporate Bond Spreads Over 1-Year Treasury, Basis Points Baa Spread: 322 bps Aaa Spread: 183 bps Spreads have returned to a more normal level; bond issuance is strong Source: Federal Reserve Board and Securities, LLC 31 Debt Issuance: A New Mix Issuance has swung away from riskier debt High Grade High Yield $9 Investment Grade Monthly Issuance 3-Month Moving Average; Volume (in Billions) & Number of Deals 9 $35 High Yield Monthly Issuance 3-Month Moving Average; Volume (in Billions) & Number of Deals 7 Issuance: $87.4 B (Left Axis) Issuance: $5.1 B (Left Axis) $8 Deals: 52 (Right Axis) 8 $3 Deals: 9 (Right Axis) 6 $7 7 $6 6 $25 5 $5 5 $2 4 $4 4 $15 3 $3 3 $1 2 $2 2 $1 1 $5 1 $ $ Source: Securities, LLC 32

17 High Yield Assets $94 High Yield Corporate Bonds ETF Weekly Price $94 $92 $92 $9 $9 The recent rally in risk assets was short lived $88 $86 $88 $86 $84 $84 $82 High Yield Corporate Bond ETF: $82.75 $82 $8 $8 Jan-1 Mar-1 Jun-1 Sep-1 Dec-1 Feb-11 May-11 Aug-11 Nov-11 Source: Bloomberg LP and Securities, LLC 33 Volatility 14 Historical Volatility Investment Grade and Treasury Debt Volatility in Treasury debt continues Year Treasury ETF: 9.37 Investment Grade Corporate ETF: 5.72 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 2 Source: Bloomberg LP and Securities, LLC 34

18 Mortgage Origination Year Mortgage Rate and 3-Year MBS Spread Basis Points Spread: 41 Bps The appetite and capacity for mortgage originations in the banking sector are outside the Fed s control Jan-1 Jul-1 Jan-11 Jul-11 Source: Freddie Mac, Bloomberg LP and Securities, LLC 35 Inflation vs. Yields: Negative Real Yields, Three Non-Market Buyers Inflation and the Real Yield Percent 5-Year Treasury Note Yield: Median Inflation Expectation for 5-1 Years: 2.6% Inflation expectations exceed nominal returns Average Median Inflation Expectation for 5-1 Years: 2.9% Source: Federal Reserve Board and Securities, LLC 36

19 Corporate Profits: Global Growth Corporate Profits Growth Year-over-Year Percent Change Adjusted for Inventory Valuation & Capital Consumption Profits growth has moderated typical cyclical pattern Corporate Profits: 7.9% Source: U.S. Department of Commerce and Securities, LLC 37 Corporate Profits A significant portion of profits are being earned abroad Globalization and Corporate Profits Sector Percentage of Total Sales Earned Abroad (7-9 Average) Information Technology 56.9% Energy 48.1% Materials 44.9% Industrials 36.7% Consumer Staples 27.5% Consumer Discretionary 24. Financials 18. Health Care 17.4% Telecommunications.6% Source: Factset and Securities, LLC 38

20 Banking 3.5% 3. Total Loan Charge-Off Rate Percent of Average Loans at Commercial Banks, SA Total Loans: 1.68% 3. 25% 2.5% 2.5% 2. Charge-off rates are declining as households and businesses repair their balance sheets % % 1. 5%.5%.5% Source: Federal Reserve Board and Securities, LLC 39 Banking 4 Commercial & Industrial Lending At Domestically Chartered Banks, 3-Month Annualized Rate Banks are lending Commercial & Industrial Loan Growth: Source: Federal Reserve Board and Securities, LLC 4

21 Banking Standards are being relaxed, but demand for loans has fallen sharply in recent months Standards Demand Net Percentage of Banks Tightening Standards Commercial & Industrial Loans Net Percent of Banks Reporting Stronger Demand Commercial and Industrial Loans C&I Loans to Small Firms: -6.3% C&I Loans to Large & Medium Firms: -5.9% -4-8 Demand for C&I Loans to Large & Medium Firms: -15.7% Demand for C&I Loans to Small Firms: -18.8% Source: Federal Reserve Board and Securities, LLC 41 Financing Gap $35 $3 $25 $2 $15 Financing Gap Capital Expenditures Minus Internally Generated Funds $35 $3 $25 $2 $15 Many companies are currently able to fund their own capital expenditures $1 $5 $ -$5 -$1 -$15 -$2 -$25 Financing Gap, 4-Quarter Moving Sum: -$182.4 B -$ $1 $5 $ -$5 -$1 -$15 -$2 -$25 -$3 Source: Federal Reserve Board and Securities, LLC 42

22 Banking Interest Margins 5. Net Interest Margin All U.S. Banks The initial boost to margins from a low fed funds target rate is fading Net Interest Margin: Source: Federal Financial Institutions Examination Council and Securities, LLC 43 Banking U.S. banks have relatively little bank exposure to the European periphery Country Exposure to Europe U.S. Exposure to Europe 3 25% Bank Exposure to Peripheral Europe Percent of GDP, June 211 Italy Spain Portugal Ireland Greece 3 25% U.S. Bank Exposure to Select European Countries Billions of U.S. Dollars, As of June 211 France $272 Germany $235 Netherlands $ Switzerland $88 15% 15% Spain $67 Ireland $ Italy $47 Other Areas of US Bank Exposure Billions of USD 5% 5% Greece Portugal $8 $5 Europe $1,824 United Kingdom $78 Other Dev. Countries $571 FR NE PT BE UK GE SZ IR AS SP IT JP SW US CA $ $5 $1 $15 $2 $25 $3 Source: Bank for International Settlements and Securities, LLC 44

23 European Sovereign Debt Italian 1 Year Government Bond Basis Points Italian bond prices are under pressure Year Italian Bond: Feb-11 May-11 Aug-11 Nov Source: Bloomberg LP and Securities, LLC 45 Banking: Assets to GDP Size is a relative matter Country Institution Major Banks' Assets to Home Country GDP Percent, % 164% 57% United States United Kingdom Switzerland Canada Institution Total Assets (Billions) Country Assets to GDP Bank of America Corporation 2,265 United States 15% JPMorgan Chase & Co. 2,118 United States 14% Citigroup Inc. 1,914 United States 13% & Company 1,258 United States 9% U.S. Bancorp 38 United States 2% PNC Financial Services Group, Inc. 264 United States 2% Bank of New York Mellon Corporation 247 United States 2% Royal Bank of Canada 713 Canada 45% Toronto-Dominion Bank 68 Canada 39% Bank of Nova Scotia 517 Canada 33% BMO Financial Group 44 Canada 26% Canadian Imperial Bank of Commerce 345 Canada 22% HSBC Holdings Plc 2,455 United Kingdom 19% Barclays Plc 2,333 United Kingdom 14% Royal Bank of Scotland Group Plc 2,276 United Kingdom 11% Lloyds Banking Group Plc 1,554 United Kingdom 69% Standard Chartered Plc 517 United Kingdom 23% UBS AG 1,411 Switzerland 269% Credit Suisse Group AG 1,15 Switzerland 211% Source: SNL Financial LC, IMF and Securities, LLC 46

24 U.S. and Developing Asia 6 5 United States and Developing Asia Saving and Investment Rates, Percent of GDP U.S. Investment: 15.7% U.S. Saving: 12.2% Dev. Asia Investment: 41.2% Dev. Asia Saving: 45.3% High saving/investment rates in Asia should continue to underpin strong economic growth for the foreseeable future Source: International Monetary Funds and Securities, LLC 47 Difficult Choices 4. Federal Budget Balance Percentage of GDP Forecast. -2. The nation has entered uncharted waters in fiscal policy Budget Balance: -8.7% Source: U.S. Department of Commerce, U.S. Department of the Treasury and Securities, LLC 48

25 Outlook Summary U.S. Economic Outlook Actual Forecas Real Gross Domestic Product Personal Consumption Equipment and Software Government Purchases Consumer Price Index Corporate Profits Before Taxes Year Treasury Note Forecast as of: November 22, Compound Annual Growth Rate Quarter-over-Quarter 2 Year-over-Year Percentage Change Source: U.S. Department of Commerce, U.S. Department of Labor, Federal Reserve Board and Securities, LLC 49 Appendix

26 Economics Group Publications A Sampling of Our Recent Special, Regional & Industry Commentary Recent Special Commentary November-22 The Deficit Reduction Committee: A Successful Failure Silvia, Bullard, Brown & Watt November-22 Giddy-Up Jingle Horse: Holiday Sales Preview Vitner, Quinlin, & Seydl November-16 Global Chartbook: November 211 November-15 Has the Fed s Unconventional Approach Been Successful? Silvia & Khan November-15 Economic Mobility: Is Rags to Riches Still Possible? Silvia, Quinlan & Seydl November-14 U.S. States with Exposure to a European Recession Vitner & Brown November-7 North Carolina: A Story of Uneven Progress Silvia & Brown November-3 Is U.S. Manufacturing in Decline? Anderson, Brown & Swankoski November-2 ASEAN-5 Economies Fundamentally Sound Bryson November-2 Employment: Beyond the Sound Bites Reading the Signals IV Silvia & Watt November-1 Character of Recovery V: Sector and Employment Differences Silvia & Iqbal October-25 Regional Chartbook: Quarter 4, 211 Vitner, Brown & Seydl October-11 Employment: Beyond the Sound Bites Reading the Signals V Silvia & Watt October-6 Real Home Prices: A Metro-Area Look Vitner & Seydl October-3 More QE from the BoE? Bryson To join any of our research distribution lists please visit our website: economics September-28 Economic Dynamism in Southeast Asia Silvia September-27 Ireland: Good News from the European Periphery? Bryson September-27 Independent Nations, Interdependent Economies Silvia September-26 Employment: Beyond the Sound Bites Reading the Signals IV Silvia & Watt September-21 "Operation Twist" Gets Underway Bryson September-2 Credit Quality Monitor: September 211 Anderson & Kashmarek September-16 Global Chartbook: September 211 September-15 Florida Economic Outlook: September 211 Vitner, Brown & Seydl September-9 The Direction of Treasury Rates: A Japanese Story? Anderson, Bryson & Seydl September-8 Long-Term Unemployment: Costs & Consequences Silvia & Watt September-7 Housing Data Wrap-Up: September 211 Vitner, Khan & Seydl September-7 Brazil: GDP and Central Bank Autonomy Aleman September-6 Strength of Currency Weighs on Swiss GDP Growth Bryson September-2 Is Another Recession Brewing in Germany? Bryson & Kruse September-1 Housing and Arizona, Rebuilding a Marketplace Aleman & Kruse August-3 The Evolution of Economic Relationships: The PMI and Growth Silvia, Iqbal & Watt August-26 Tacking in Treacherous Water: No Full Sail for QE3 Silvia August-26 Brazilian Economy: Growing Pains Aleman August-24 Will the Renminbi Eventually Rival the Dollar? Bryson August-23 State Coincident Indicators Highlight A Disturbing Trend Vitner & Brown August-23 Are We Headed for Another Global Recession? Bryson, Quinlan & Kruse August-22 Philadelphia Fed Index: Can It Predict a Recession? Silvia, Khan, Iqbal & Watt August-22 Gold Bubble Fears Overblown Anderson & Kashmarek August-22 Mexican Economy Grows Despite Slowdown in Q2 Aleman August-22 The Kids Are Alright Silvia, Quinlan & Seydl August-19 Even Slower Growth with Significant Downside Risk Silvia August-15 Why Is France in the Crosshairs? Bryson & Kruse August-11 Commercial Real Estate Chartbook: Quarter 2 Vitner, Khan & Seydl August-11 Employment: Beyond the Sound Bites Reading the Signals III Silvia & Watt August-7 S&P Downgrade of Treasury /Fed Credit: Fiscal Imbalances Silvia & Vitner August-5 What are the Risks of Recession? Vitner August-2 Economic Implications of the Debt Ceiling Compromise Silvia, Vitner, Bullard & Brown August-2 Real GDP Per Capita Stalled Out In the First Half of 211 Vitner & Seydl August-1 Employment: Beyond the Sound Bites Reading the Signals II Silvia & Watt 51 Securities, LLC Economics Group a Senior Economists Global Head of Research and Economics: Diane Schumaker-Krieg Chief Economist: John Silvia 31 S. College Street MAC D Charlotte, NC John Silvia, Chief Economist john.silvia@wellsfargo.com Mark Vitner, Senior Economist mark.vitner@wellsfargo.com Jay Bryson, Global Economist jay.bryson@wellsfargo.com Scott Anderson, Senior Economist scott.a.anderson@wellsfargo.com Eugenio Aleman, Senior Economist eugenio.j.aleman@wellsfargo.com Sam Bullard, Senior Economist sam.bullard@wellsfargo.com Economists Anika Khan, Economist anika.khan@wellsfargo.com Azhar Iqbal, Econometrician azhar.iqbal@wellsfargo.com Ed Kashmarek, Economist ed.kashmarek@wellsfargo.com Tim Quinlan, Economist tim.quinlan@wellsfargo.com Michael Brown, Economist michael.a.brown@wellsfargo.com Economic Analysts Joe Seydl, Economic Analyst joseph.seydl@wellsfargo.com Sarah Watt, Economic Analyst sarah.watt@wellsfargo.com Kaylyn Swankoski, Economic Analyst kaylyn.swankoski@wellsfargo.com Executive Assistants Peg Gavin (Charlotte), Executive Assistant peg.gavin@wellsfargo.com Carol Nightengale (Minneapolis), Executive Assistant carol.nightengale@wellsfargo.com Securities Economics Group publications are produced by Securities, LLC, a U.S broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Securities Investor Protection Corp. 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