Courage is not the absence of fear, but the capacity to act despite our fears. (John McCain)

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1 David J. Klein Senior Vice President Financial Advisor RBC Wealth Management Fax: Anthony Hubick First Vice President Branch Director Private Client Group Consulting Group RBC Wealth Management Fax: August 27, 2018 Courage is not the absence of fear, but the capacity to act despite our fears. (John McCain) Weekly Update: From time to time the weekly update might skip a week or two due to other timely considerations such as family, social, or other important considerations. I hope you will understand and continue to be faithful and loyal readers. Our Website: The latest edition of RBC s Global Insight is in the middle of the front page while RBC s Investor s Edge is on the bulletin board on the right side of the main page. Please note the other interesting articles and commentaries. Key Statistics Year-to-date a/o 8/24/2018 Dow: +4.43% S&P 500: +7.52% Nasdaq: % Treasury Bond Yields: Year- to-date a/o 8/24/ year Treasury: 2.44% 2-year Treasury: 2.63% 5-year Treasury: 2.72% 10-year Treasury: 2.82% Yields lower than last week s close 30-year Treasury: 2.97% --Yields have barely moved over the past several weeks --The spread between the 2-yr and 10-yr Treasury remains at a tight 19 basis points --Notice in the following chart how the yields on the 2-year and the 10-year have moved closer and closer. What is your perception of this activity?

2 US Economy: (Walter Williams, Economist, IBD) Our economy is growing!! Whether you like Trump s personal style or not, here are some of the many positive economic/political achievements of the Trump presidency: Trump has appointed Neil Gorsuch and nominated Brett Kavanaugh to the US Supreme Court. Both have stellar judicial qualifications and a deep respect for the US Constitution Trump has passed through Congress the largest personal and corporate tax cuts since the Reagan administration The Trump administration has reduced government regulations by 35% These reductions have led to the biggest energy boom in history US is the world s #1 producer ending our dependence on foreign oil Tax cuts and deregulation have now led to growth of the economy of over 4% Unemployment is now at 3.9% - among the lowest in US history We now have the highest quarterly level of job openings since 2001 The Tax Cuts and Jobs Act is encouraging employers to ramp up hiring and boost wages NATO is coughing up more money for their defense Time will tell how the tariff situation works out The following chart shows how small business has become more and more optimistic over the past few years. Currently, they are as optimistic as they were back in The following chart shows that as business has grown, there are not always enough qualified workers for certain jobs.

3 Gradual rate hikes are Fed Chairperson Powell: Powell staying on rate-hike course Says that further rate hikes are the best way to protect the recovery Gradual rate hikes are the best way to keep job growth as strong as possible and inflation under control Fed is very confident in the US economy no intention of slowing down rate hikes

4 Markets: (Barron s, IBD, WSJ, RBC, MFS, Advisor Perspectives) For the week: Dow rose +0.47%, S&P 500 rose +0.86%, Nasdaq rose +1.66% S&P 500 and the Nasdaq hit new all-time highs Corporate earnings have been relatively strong Retail sales strong on strong consumer sentiment New home sales fell in July for the 2 nd consecutive month Question of the Week: Fill in the blank: Personal consumption by American consumers represents % of the US economy. Question and Answer From Last Week: FAANG is a term frequently used to identify 5 different heavily-traded companies. Name these 5 companies Answer: The 5 FAANG stocks are Facebook, Amazon, Apple, Netflix, and Alphabet (Google) Did You Know: 3 out of every 8 homeowners (38%) in the USA own their home free-and-clear of any debt, i.e., 29.7million debt-free homeowners out of 77.9 million total homeowners (BTN, Census Bureau) Foreigners have increased their holding of US Treasury securities from $1 trillion in 2000 to more than $6.2trillion in (BTN Research, St. Louis Federal Reserve Ban) Sports Trivia: The Miami Marlins had a 9-run lead going into the bottom of the 4 th inning of their 7/5/18 game against the Washington Nationals. Yet, they lost the game by 2 runs. This was the worst collapse during the current 2018 regular season through 8/16/18. (BTN Research, MLB) Your Referrals: Many sincere thanks for your referrals of family, friends, and associates. We are deeply appreciative. Sincerely, David and Tony The Auctus Group The views presented here are solely the views and opinions of David Klein and do not reflect the views of RBC Wealth Management, or its officers and directors. Data is believed to be from reliable sources, but we make no representation as to its accuracy or completeness.

5 The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal. The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues. The Nasdaq Composite is a market-value The views presented here are solely the views of David Klein, and do not reflect the views of RBC Wealth Management, or its weighted index that measures all Nasdaq domestic and foreign common stocks. The Standard and Poor s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment. This material is based on data obtained from sources considered to be reliable. However, it is not guaranteed to accuracy and does not purport to be complete. The illustrations are for informational use only. RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in conjunction with you independent tax or legal advisor.rbc Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC