"Honesty is the first chapter in the book of wisdom (Thomas Jefferson)

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1 David J. Klein Senior Vice President Financial Advisor The Auctus Group RBC Wealth Management Phone: Fax: Toll Free: website: February 26, 2018 "Honesty is the first chapter in the book of wisdom (Thomas Jefferson) My Website: In the middle of the front page is a report on the Global Market Outlook from RBC. The latest edition of RBC s Investors Edge is on the bulletin board on the right side of the main page. Many interesting articles and commentaries. Please take a look. Key Statistics Year-to-date a/o 2/23/2018 Dow: (2.39%) S&P 500: (2.76%) Nasdaq: (6.29%) Treasury Bond Yields: Year- to-date a/o 2/23/ year Treasury: 2.02% 2-year Treasury: 2.25% 5-year Treasury: 2.62% 10-year Treasury: 2.88% -- highest level since September, year Treasury: 3.16% --yields rose to 4-year highs last week Markets: (Barron s, IBD, WSJ, RBC, MFS, Advisor Perspectives) For the week: Dow rose +0.36%, S&P 500 rose +0.55%, Nasdaq rose +1.35% Stocks ended the week on a strong note on Friday major indices all up over 1% According to the Wall Street Journal, Amazon, Microsoft and Netflix have accounted for almost half of the S&P 500 s advance so far this year Global equities declined slightly Oil rose to $63/barrel

2 Market Corrections: While the recent correction of over 10% was a shock to most investors, it was pretty normal by historical standards. How many remember the 19% correction that occurred between April and October, 2011? While there were other corrections of less than 10%, the following chart only highlights the corrections of 10% or more. Economic News: (Barron s, IBD, WSJ, RBC, MFS, Advisor Perspectives) Jerome Powell is the new head of the Federal Reserve replacing Janet Yellen Fed has acknowledged the strengthening growth outlook in the US Some economists are projecting 3-4 short-term rate hikes by the Fed this year Growth projected because of the recent tax cuts Unemployment rate at 4.1% - some expecting it to go lower People are working and jobless claims have receded

3 While government requirements, red tape, and taxes have been the major concerns of small businesses, the recent lightening of those regulations and reduction in taxes has been a strong positive for them Notice that one of the new major concerns is the quality of labor the ability of businesses to find talented workers for many more of the higher-skilled jobs As the economy has been growing, so too has there been a boom in oil exports with the opening of the Keystone pipeline and further deregulation in the oil industry

4 Sequence of Returns: Last week I asked you to do the math to determine whether you would prefer to be Investor A or Investor B as presented in the following table. Investor B comes out with the better performance. $11,979 $12,155 Question of the Week: Our nation s unemployment rate is currently at 4.1%. What was the lowest national unemployment rate in US history? (answer next week) Question and Answer From 2 Weeks Ago: In our current economy, how do we define millennials and baby boomers? What age group and birth years define them. Which is the biggest group of the two? Answer: As of the end of 2017, there are 83 million millennials as compared to 76 million Baby Boomers. Millennials were born between and were age in Baby Boomers were born between and were age in (Census Bureau, BTN Research) Did You Know: It took $80,580 of adjusted gross income (AGI) in 1980 to rank in the top 1% of taxpayers. In 2015, it took $79,655 of AGI to rank in the top 25%. (BTN Research, IRS) On Monday, 2/12/18, the White House released a 10-year projection of our nation s outstanding debt. As of 2/12/18, our debt was at $20.7 trillion. It is forecasted to reach $29.97 trillion by (White House, BTN Research) Sports Trivia: Major League baseball training season has opened. The minimum salary for a major league baseball player in 2018 is $545,000. Based on tax data from 2015, you would rank in the top 1% of all taxpayers with an adjusted gross income of at least $480,930. (MLB) Referrals: Many sincere thanks for your referrals of family, friends, and associates. I am deeply appreciative. Sincerely, David J. Klein Senior Vice-President Financial Advisor

5 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.. 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 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 your independent tax or legal advisor. RBC Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC.