Chart 1. U.S. Personal Saving Rate and Household Debt (consu plus mortgage) as a % of Disposable Personal Incom

Transcription

1 Chart 1 U.S. Personal Saving Rate and Household Debt (consu plus mortgage) as a % of Disposable Personal Incom 16% 14% 12% 10% 8% 6% 4% Last Points 4Q Saving Rate, 5.4%; HH Debt, 1 140% 130% 120% 110% 100% 90% 80% 70% 60% 2% Jan-59 Jan-65 Jan-71 Jan-77 Jan-83 Jan-89 Jan-95 Jan-01 Jan-07 Jan-13 50% Saving Rate (SAAR) - left axis Household Debt as a % of Disposable Personal Income - right axis Source: Bureau of Economic Analysis; Federal R

2 Chart 2 Real GDP Growth During Expansions annualized rates of expansion from NBER trough-to-peak 8% 7% 7.6% 8% 7% 6% 5.6% 6% 5% 4.9% 5.1% 4.3% 4.4% 4.3% 5% 4% 4.0% 3.6% 4% 3% 2.8% 3% 2% 2.1%* 2% 1% 1% 0% Recession Start Date *Through 1Q 2016 Source: BEA, NBER 0%

3 Chart 3 Eurozone Real GDP Growth 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% -12.0% Last Point 1Q 2016: Q/Q, 2.2%; Y/Y, 1.6% 6.0% quarter/quarter % change, seas. adj. annual rates year/year % change Source: eurostat 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% -12.0%

4 Chart 4 Japanese Real GDP Growth 15% 10% 5% 0% -5% -10% -15% -20% Last Points 4Q 2015: Q/Q, -1.1%; Y/Y, % quarter/quarter % change, seas. adj. annual rates year/year % change 10% 5% 0% -5% -10% -15% -20% Source: Japanese Cabinet Office

5 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% Chart 5-50% Jan-07 Sep-08 May-10 Jan-12 Sep-13 May-15 Federal Reserve European Central Bank Central Bank Assets change since January 2007 Bank of England Bank of Japan Last Points: April % 400% 350% 300% 250% 200% 150% 100% 50% 0% -50% Source: Bloomberg; The Central Bank

6 Chart 6 S&P 500 Index Last Point 05/12/16: 2, Jan-07 Dec-08 Dec-10 Dec-12 Dec Source: Thomson Reuters

7 Chart 7 Historical Fed Committee Forecasts for Real GDP Gro based on central tendency midpoint forecast at first FED meeting of th 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 1.0% Actual Real GDP Note: Longer run forecast used for 2018 forecast made in Source: Federal Reserve

8 Chart 8 Corporate Profits and Employee Compensation as a percentage of National Income 68% 67% 66% 65% 64% 63% 62% 61% 60% 59% Last Points 4Q Corp. Profits: 12.1%, Employee Comp 15% 58% 1947-I 1959-III 1972-I 1984-III 1997-I 2009-III Compensation of Employees - left axis Corp. Profits with IVA and CCAdj - right axis 14% 13% 12% 11% 10% 9% 8% 7% Source: Bureau of Economic Analys

9 Chart 9 Real Weekly Wages and Household Incomes year/year percent changes 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% Last Points Income: -1.5%, Wages: 1. 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Avg. Real Weekly Wages of Production and Supervisory Employees Real Median Household Income Source: Bureau of Labor Statistics; Census Bureau -6%

10 Chart 10 Labor Force Participation Rate 68% 67% 66% 65% 64% 63% 62% 61% 60% 59% Last Point April 2016: 62.8% 68% 67% 66% 65% 64% 63% 62% 61% 60% 59% 58% Jan-48 Jan-57 Jan-66 Jan-75 Jan-84 Jan-93 Jan-02 Jan-11 58% Source: Bureau of Labor Statistics

11 Chart 11 Retail Sales retail trade and food services 1.5% 1.0% 0.5% 0.0% -0.5% Last Point April 2016: M/M, 1.3%; Yr/Yr, 3.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -1.0% Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar % Month/Month Percent Change - left axis Year/Year Percent Change - right axis Source: U.S. Census Bureau

12 Chart 12 Chinese Real Gross Domestic Product year/year percent change 16% Last Point 1Q 2016: 6.7% 16% 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% % Source: Bloomberg; Chinese National Bureau of Statis

13 Chart 13 Chinese Exports year/year percent change 60% 50% 40% 30% 20% 10% 0% -10% -20% Last Point April 2016: -1.8% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Jan-07 Sep-08 May-10 Jan-12 Sep-13 May-15-30% Source: China General Administration of Custom

14 Chart 14 Chinese Total Debt as a Share of GDP includes corporate, household, government and bank debt 250% 240% 230% 220% 210% 200% 190% 180% 170% 160% Last Point 2015: 246.8% 250% 240% 230% 220% 210% 200% 190% 180% 170% 160% 150% % Source: Bloomberg

15 Chart 15 United States Manufacturing Value Added as % share of GDP 17.0% 16.5% 16.0% 15.5% 15.0% 14.5% 14.0% 13.5% 13.0% 12.5% 12.0% Last Point 4Q 2015: 12.0% 17.0% 11.5% % 16.0% 15.5% 15.0% 14.5% 14.0% 13.5% 13.0% 12.5% 12.0% 11.5% Source: Bureau of Economic Analysis; The World B

16 Chart 16 G7 and BRIC Personal Consumption to GDP Ratio: 2014 U.S. 68.6% U.K. Brazil Japan Italy India Germany Canada France Russia 64.7% 62.5% 61.1% 61.1% 59.3% 55.9% 55.8% 55.5% 53.0% China 36.5% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% Source: The World Bank

17 Chart 17 Reuters/Jeffries CRB Index and WTI Crude Oil Last Points 05/12/16- CRB: ; WTI: $ Jan-15 Mar-15 May-15 Aug-15 Oct-15 Dec-15 Mar-16 CRB Index - left axis WTI Crude Oil (dollars per barrel) - right axis 25 Source: Thomson Reuters

18 Chart 18 Iron Ore and Nickel $ per tonne Last Point 05/12/16: Iron Ore, $54.50; Nickel, $ Jan-07 Sep-08 May-10 Jan-12 Sep-13 May-15 Iron Ore - left axis Nickel - right axis 5000 Source: Thomson Reuters; Bloomber

19 Chart 19 Real U.S. Commodity Prices CRB Index Deflated by CPI Last Point March 2016: Source: Bianco Research, Bureau of Labor Statistics, Historical Statistics of th

20 10% Chart 20 Brazil and Russia Real GDP Growth year/year percent change Last Points 4Q 2015: Brazil, -5.9%; Russia, % 5% 5% 0% 0% -5% -5% -10% -10% -15% -15% Mar-07 Jun-08 Sep-09 Dec-10 Mar-12 Jun-13 Sep-14 Dec-15 Brazil GDP Russia GDP Source: Brazil Institute of Geography and Statistics; Bloomb

21 Chart 21 Total Oil Output for Non-OPEC and OPEC Countries million barrels per day Non-OPEC OPEC Last Points 3Q Non-OPEC: 58.68; OPEC: Source: Energy Information Administratio

22 Chart 22 United States Crude Oil Production million barrels per day Last Points 05/6/16: Source: Energy Information Administra

23 Chart 23 Crude Oil Rotary Rig Count and Average Oil Production Per Rig Last Points April 2016: Rigs, 372; Oil Prod., Rig Count - left axis Average Oil Production Per Rig (barrels/day) - right axis Source: Bloomberg; Baker Hughes

24 Chart 24 Oil Breakeven Price for Major Petrostates $ per barrel $250 $200 $208 $250 $200 $150 $150 $100 $50 $52 $58 $68 $70 $76 $89 $93 $96 $98 $105 $100 $50 $0 Kuwait Qatar U.A.E. Iran Current Brent Crude, $/barrel: $48.08 Iraq Venezuela Algeria Saudi Arabia Oman Bahrain Libya *Breakeven price needed in order to balance the national budget. Source: Bloomberg; The Wall Street Journ $0

25 Chart 25 OPEC Oil Output By Country million barrels per day Last Point: April Saudi Arabia 4.3 Iraq Iran U.A.E. Kuwait Venezuela Angola Nigeria Algeria Indonesia Qatar Ecuador Libya Source: Bloomberg

26 Chart 26 Saudi Arabia Foreign Exchange Reserves billion USD Last Point March 2016: $ Source: Bloomberg; International Monetary F

27 Chart 27 A Successful Cartel 1. Involves a commodity that can otherwise be left in the ground, avoiding production and inventory costs until it s needed. 2. Its product is so much in demand that buyers are relatively insensitive to price. 3. The commodity has few if any close substitutes. 4. It includes most of the low-cost suppliers and has few meaningful non-cartel competitors. 5. It involves relatively few cartel members, thereby promoting discipline. 6. It's sponsored by governments and even religious authorities that benefit from the cartel and protect it. 7. It operates in a period of strong economic growth and robust demand for the product. 8. It faces few technological improvements in the industry.

28 Chart 28 Unfavorable Climate for OPEC 1. Alternatives to oil, especially natural gas but also government-subsidized renewables, are growing. 2. Non-OPEC supplies are leaping, notably from Russia and especially American frackers. 3. Infighting among OPEC members has destroyed discipline. 4. Global economic growth is weak, and the ongoing shift from goods production to services in China and elsewhere is curbing oil demand. 5. Conservation is limiting oil demand. 6. Rapid technological advances in fracking, horizontal drilling, deep-water and Arctic drilling, etc. are mushrooming non-opec supplies at low and declining costs.

29 Chart 29 Annual Average Oil Demand for OECD and Non-OECD Countr million barrels per day 60 Last Points 2015: OECD, 46.39; Non-OECD, OECD Non-OECD Source: The Wall Street Journal; Bloomberg

30 Chart 30 World Crude Oil Supply and Demand million barrels per day Last Points 4Q 2015: Ex. Supply, 1.7; Demand, 95.5; Su Excess Supply - left axis Demand - right axis Supply - right axis Source: Bloomberg; International Energy Age

31 Chart 31 Commercial Crude Oil Inventory weekly U.S. ending stocks Last Points 05/6/16: Inventory: 539.9; Yr/Yr: 1 30% 25% 20% 15% 10% 5% 0% 200 Jan-14 Apr-14 Aug-14 Dec-14 Mar-15 Jul-15 Nov-15 Crude Oil Inventory (million barrels) - left axis Year/Year Percent Change - right axis -5% Source: Energy Information Administra

32 Chart 32 Crude Oil Storage Capacity Utilization Cushing, OK 90% 80% 70% 60% 50% 40% 30% Last Points 05/6/16: Shell, 77.3%; Working, 9 90% 80% 70% 60% 50% 40% 30% 20% Mar-11 Oct-11 May-12 Dec-12 Jul-13 Feb-14 Sep-14 Apr-15 Nov-15 Tank Net Available Shell Storage Capacity Utilization Tank Working Storage Capacity Utilization Note: Net available shell includes idle (not working) capacity. 20% Source: Energy Information Administrat

33 Chart 33 WTI Crude Oil Futures Curve 05/12/16 close prices; dollars per barrel Jun-16 Feb-18 Oct-19 Jun-21 Feb-23 Oct-24 Source: Bloomberg

34 65 Chart 34 Total Crude Oil Storage in Amsterdam-Rotterdam-Antwerp Region million barrels Last Point 05/6/2016: Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Jan-15 May-15Sep-15 Jan Source: Bloomberg

35 Stronger U.S. Dollar Stronger U.S. Dollar Chart 35 Chinese Yuan Per U.S. Dollar /11/15: People's Bank of China lowers yuan reference rate Last Point 05/12/16: Jan-15 Mar-15 May-15 Jul-15 Oct-15 Dec-15 Feb-16 May-16 Source: Bloomberg

36 Chart 36 Chinese Trade Balance and Capital Flow billion USD Last Points 03/16: Cap. Flow, -$44.3; 04/16: Balance, $ Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15 Monthly Capital Flow - left axis Trade balance - right axis Source: Bloomberg

37 Chart 37 Chinese Foreign Exchange Reserves billion USD Last Point April 2016: $3, Jan-00 Sep-01 May-03 Jan-05 Sep-06 May-08 Jan-10 Sep-11 May-13 Jan-15 0 Source: Bloomberg

38 Stronger U.S. Dollar Stronger U.S. Dollar Chart 38 Brazilian Real and Russian Ruble Exchange Rates Last Points 05/12/16: Real: 3.485; Ruble: Dec-13 May-14 Oct-14 Feb-15 Jul-15 Dec-15 Apr BRL/USD - left axis RUB/USD- right axis Source: Thomson Reuters

39 Stronger U.S. Dollar Chart 39 Mexican Peso and WTI Crude Oil Last Points 05/12/16 - Pesos/$:17.964; WTI: $ Jan-14 May-14 Oct-14 Feb-15 Jul-15 Dec-15 Apr-16 Mexican Pesos per U.S. Dollar - left axis WTI Crude Oil ($/barrel) - right axis Source: Thomson Reuters

40 Stronger U.S. Dollar Stronger U.S. Dollar Chart 40 Euro and Yen Exchange Rates Jul-12 Apr-13 Jan-14 Oct-14 Jul-15 May-16 USD/EUR - left axis (inverted) JPY/USD - right axis Last Points 05/12/16 - USD/EUR: 1.138; JPY/USD: Source: Thomson Reuters

41 Chart 41 Producer Price Index year/year percent change 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% Jan-14 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 United States Eurozone Japan Last Points 04/16: U.S., 0.0%; 03/16: Japan, -3.8%; EZ, 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% Source: Bloomberg; Bureau of Labor Statis

42 Chart 42 Chinese Producer Price Index 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% Last Points April 2016: M/M, 0.7%; Yr/Yr, % 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -1.5% Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan % Month/Month Percent Change - left axis Year/Year Percent Change - right axis Source: Bloomberg

43 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% Chart 43 U.S. Personal Consumption Expenditures Implicit Price Defla year/year percent change Last Points March Goods: -1.8%; Services: 6% -5% Jan-07 Sep-08 May-10 Jan-12 Sep-13 May-15 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% Goods Services Source: Bureau of Economic Analysis

44 Chart 44 PCE Deflator seasonally-adjusted 1.0% Last Point March M/M: 0.1%; Y/Y: 0.8% 6.0% 0.5% Fed Target: 2.0% 3.0% 0.0% 0.0% -0.5% -3.0% -1.0% -6.0% -1.5% Month/Month % Change - left axis Year/Year % Change - right axis -9.0% Source: Bureau of Economic Analysis

45 Chart 45 Japanese CPI and Real GDP year/year percent change 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% Last Points 4Q GDP: 0.8%; CPI: 0.3% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% Real GDP Consumer Price Index -10% Source: Japanese Cabinet Office

46 1. Short commodities Chart 46 Investment Themes 2. Short crude oil and related securities 3. Long the dollar vs. euro and yen, commodity currencies and developing economy currencies 4. Short emerging market stocks and bonds 5. Short junk bonds 6. Long 30-year Treasuries 7. Short U.S. stocks

47 Chart Year Sovereign Bond Yields Country as of 05/12/16 Yield Spread vs. Treasurys Switzerland Japan Germany Netherlands Denmark Finland France Austria Belgium Ireland Canada Norway United Kingdom Italy Spain United States Australia Portugal Greece Source: Financial Times

48 Chart 48 Comparative Stock and Bond Performances Last Points April Stocks: 4,527; Bonds: 28, Oct-81 Oct-86 Oct-91 Oct-96 Oct-01 Oct-06 Oct Year Zero Coupon Bond (Oct-81=100) 28,666 or 17.8% Annual Return S&P 500 Total Return (July-82=100) 4,527 or 12.0% Annual Return Source: Bianco Research & Haver Analytic 0