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1 Market Perspective Global Earnings Remain Supportive November 8, 2017 Keith Lerner, CFA, CMT Managing Director, Chief Market Strategist 2017 SunTrust Banks, Inc. SunTrust is a federally registered service mark of SunTrust Banks, Inc.

2 Positive Earnings Continue to Drive Stocks Coming into 2017, we advised equity investors to lean bullish, even though we recognized the range of potential outcomes was wide due to policy uncertainty. the past month, which is the best level in the past three years. Moving forward, a more competitive US dollar, coupled with the An improved earnings outlook, especially with absolute equity valuations above their historical averages, has been a key pillar of our positive market view. The good news is we continue to see a broad-based earnings recovery. Indeed, 38 of the 46 countries we track, or 83%, are showing rising profit estimates for the next 12 months. This is important since earnings and stock prices are highly correlated. In the US, after back-to-back periods of double-digit earnings growth, the third quarter is on pace for a 6% profit increase. This is a downshift from the snapback in earnings of the previous quarters. Still, underlying trends remain positive: for the third consecutive quarter more than 60% of companies are exceeding sales expectations, which last occurred in Further, more than half of the S&P 500 companies had their earnings estimates raised by analysts over potential for lower corporate tax rates and a solid global economy, should be supportive of profits. Bottom Line: While there has been much attention focused on the political landscape both in the US and abroad, we believe the more important story for the stock market has been the powerful rebound in global profits. At this point, recession risks remain low, and we expect earnings to continue to rise. Accordingly, we continue to lean bullish. Although geopolitical uncertainties are likely to weigh on the market at times, as long as profits are improving, we advise that investors should stay with the positive market trend. From a positioning standpoint, we view the US as the big blue chip country due to its stability, yet have also become more positive on international markets given the inflection point in profits. From a sector standpoint, cyclicals such as technology, financials, materials and industrials continue to have strong earnings results and should benefit from an ongoing economic recovery. Health care continues to be a standout among the defensive sectors and should be supported by cheap valuations and secular tailwinds.

3 Record Earnings Supporting World Markets Global earnings are at a cycle high, which have been the primary driver of positive stock returns this year MSCI ACWI Index Level Global Equities vs. Earnings Forward Earnings Estimate $37 $35 $33 $31 $29 $ '10 '11 '12 '13 '14 '15 '16 '17 $25 Data Source: FactSet, MSCI, SunTrust IAG 3

4 Broad-Based Global Earnings Rebound The earnings rebound is a global story: 38 of the 46 countries we track, or 83%, have seen their forward earnings estimates rise over the past three months. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Global Markets: % of Countries With Rising 3-Month Earnings Trends 0% Data Source: MSCI, FactSet, SunTrust IAG Includes 46 countries within the MSCI All Country World Index where data is available; using earnings estimates where available. MSCI All Country World Index (ACWI) which captures large- and mid-cap representation across 23 Developed Markets (DM) and 23 Emerging Markets (EM) countries. The index covers approximately 85% of the global investable equity opportunity set.

5 S&P 500 Forward Earnings Estimate US Earnings Validate New Market Highs One of the main reasons US stocks traded sideways from late 2014 to the summer of 2016 was because earnings languished. However, profits turned positive for the first time in five quarters in the fall of 2016, and the market followed suit S&P 500 Index Level S&P 500 and Earnings Earnings are highly correlated with stock market returns $160 $150 $140 Importantly, earnings estimates for the next 12 months are at a record high, and suggest stocks are being supported by solid fundamentals $130 $ Forward Earnings Estimate $ '12 '13 '14 '15 '16 '17 $100 Data Source: FactSet; SunTrust IAG The S&P 500 is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. An investment cannot be directly made into an index. Past performance does not guarantee future results.

6 1Q-11 2Q-11 3Q-11 4Q-11 1Q-12 2Q-12 3Q-12 4Q-12 1Q-13 2Q-13 3Q-13 4Q-13 1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 4Q-16 1Q-17 2Q-17 3Q-17 US Earnings Growth Moderating but Positive After back-to-back quarters of double-digit earnings growth, the third quarter is on pace for a 6% profit increase. Moving forward, a more competitive dollar coupled with the potential for lower corporate tax rates and a solid global economy should remain supportive of profits. 25% 20% 15% 10% 5% S&P 500: Quarterly Earnings Growth (%) 6% 0% -5% -10% Data Source: FactSet, SunTrust IAG The S&P 500 is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. An investment cannot be directly made into an index.

7 1Q-03 3Q-03 1Q-04 3Q-04 1Q-05 3Q-05 1Q-06 3Q-06 1Q-07 3Q-07 1Q-08 3Q-08 1Q-09 3Q-09 1Q-10 3Q-10 1Q-11 3Q-11 1Q-12 3Q-12 1Q-13 3Q-13 1Q-14 3Q-14 1Q-15 3Q-15 1Q-16 3Q-16 1Q-17 Rate of Companies Beating Sales Remains Strong Importantly, the percentage of companies exceeding sales estimates stands at 66%, well above the long-term average of 57%. This is also the third consecutive quarter that more than 60% of companies have exceeded sales expectations, which last happened in % 70% 60% 50% 40% S&P 500: Quarterly Sales Beat Rates (%) Average 66% 30% 20% 10% 0% Data Source: FactSet, SunTrust IAG *An sales beat rate occurs when a company s sales report exceeds the consensus estimate The S&P 500 is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. An investment cannot be directly made into an index.

8 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Corporate Earnings Estimates Head Upward Over the past month, more than half of the S&P 500 companies have seen their earnings estimates raised by analysts. This is the best level in over the past three years. 60% 50% 40% 52% 30% 20% 10% 0% Data Source: FactSet, SunTrust IAG The S&P 500 is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. An investment cannot be directly made into an index.

9 Most Sectors Handily Beating Expected Earnings Cyclical sectors, such as technology, materials and financials, are among the areas showing the greatest percentage of companies exceeding analyst expectations. This is consistent with an improved global economy. On the other hand, interest-rate sensitive sectors, such as utilities and telecom, which also tend to be more defensive, are lagging. Technology Materials Health Care Financials Cons Staples Industrials Energy REITs Cons Discretion % Sector Earnings Beat Rate 78% 76% 76% 76% 74% 73% 72% 70% 89% Utilities Telecom 50% 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Data Source: FactSet, SunTrust IAG All sectors represented by the S&P GICs sectors, which in aggregate comprises the S&P 500. The S&P 500 is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. An investment cannot be directly made into an index. Past performance is not indicative of future results.

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MSCI EAFE index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. MSCI EM index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. CN EXP