Lori Calvasina Chief US Equity Strategist / Managing Director

US Equity Strategy Equity Research Americas/United States Introducing Our New Industry Scorecard Digging Down To GICS Level 3 March 16, 2017 RESEARCH ANALYSTS Lori Calvasina Chief US Equity Strategist / Managing Director +1 212-538-6396 lori.calvasina@credit-suisse.com Sara Mahaffy, CFA US Equity Strategist / Vice President +1 212-325-6824 sara.mahaffy@credit-suisse.com Joseph Eddy US Equity Strategy Team/ Associate Analyst +1 212-325-5608 joseph.eddy@credit-suisse.com DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. March 16, 2017

Key Takeaways Getting More Granular Within Sectors: Taking views on the 24 GICS industry groups (level 2) has been a longstanding part of our research, and our clients (both sector focused analysts and PMs) have expressed increasing interest in digging even deeper within sectors. And so in this report, we have applied our process to the GICS industries (level 3), across all industry groups. We rank each industry on a scale of -2 (negative) to +2 (positive), arriving at an overall score by averaging individual scores on earnings revisions trends, investor sentiment/positioning, relative valuations (doubly weighted), and interest rate sensitivity. Our work has been done on an all cap basis (the 3000 biggest US stocks by market cap, and the S&P 1500), providing a broadly useful read on each industry with a reasonably large sample size of companies. Our time horizon is 6-12 months. Detail On Our Scoring Methodology: Revisions: We track the percentage of next 4 quarters EPS estimate revisions to the upside for the group (trailing 3-month average), assigning a score by gauging the favorability of the trend on this metric. Sentiment/Positioning: We take an equal weighted combination of sell-side net buy ratings vs. the broader market and the percent of mutual funds overweight relative to benchmark both metrics are considered relative to their history since 2003, and elevated sentiment is taken as a risk of crowding while out of favor sentiment is taken as an opportunity for re-engagement. Valuations: We use equal weighted composite models of median valuation metrics relative to the broader market and vs. history since 2003 the metrics for each industry are those that we use for its parent industry group model, chosen based on extensive back testing against forward returns (see each sector page for detail on metrics). Elevated readings on our models indicate that a group is overvalued and are taken as a negative signal, while low readings are taken as a sign of valuation appeal. Interest Rate Sensitivity: Given our economists view that interest rates will rise through year end, our interest rate sensitivity score favors industries whose relative performance has shown a positive relationship with the 10-year Treasury yield since 2003, and penalizes those that have tended to move inversely to the 10 year yield; correlation is used as the measurement of the strength of these relationships. What We Are Not Factoring In: At this time, our scorecard does not include inputs Washington policy, hedge fund positioning, or an industry specialist s views on fundamentals. We did ask our Technical Strategists (David Sneddon, Chris Hine) to provide us with their views on each industry (using the S&P 1500) for additional context (1-3 month view), though they are not factored directly into our rankings. Most Intriguing Industries On Our US Equity Strategy Scorecard: Across all sectors, the highest scoring were Insurance, Metals & Mining, Diversified Financial Services, Capital Markets, Air Freight & Logistics, and Consumer Finance. Most Concerning Industries On Our US Equity Strategy Scorecard: Across all industries, the lowest scoring were Software, Transportation Infrastructure, Food Products, and Internet & Direct Marketing Retail. General Takeaways on the Technical Scores: The Technical Strategy team generally finds trends constructive for most of the industries within Financials, Health Care, Industrials, Tech, and Utilities, negative trends on both Energy industries, and more differentiation within other sectors. Overlapping, Positive Scores on US Equity Strategy & Technical Strategy: We are most in alignment with our Technical strategists on Financials. Specific groups that rank well on both the US Equity Strategy Industry Scorecard and have positive Technical scores include Insurance, Diversified Financial Svcs, Capital Markets, Air Freight & Logistics, Consumer Finance, Media, Automobiles, and Comm l Svcs & Supplies. Consumer Discretionary Takeaways: Within the sector, our indicators suggest that Automobiles, Media, Multiline Retail, and Specialty Retail are more intriguing, while Internet & Direct Marketing Retail, Auto Components, and Distributors are more concerning. Valuations appear attractive or reasonable for Automobiles, Media, Multiline Retail, and Specialty Retail, EPS revisions momentum is reaccelerating for Autos and Media, and Specialty Retail appears deeply out of favor on the sell-side. On the other hand, Auto Components, Distributors, and Internet & Direct Marketing Retail are all subject to crowding risks, especially among mutual funds. Valuations are also elevated for Auto Components and Internet Retail, and both Distributors and Internet Retail have displayed highly negative interest rate sensitivities. 2

Key Takeaways Consumer Staples: Within the sector, the Food & Staples Retail and Personal Products industries look more intriguing, while Food Products and Beverages are least intriguing. Food & Staples Retail is the only industry within the sector with favorable revisions trends (inflecting from levels near past lows), and also has compelling valuations along with Personal Products. On the flipside, both onerous valuations and negative interest rate sensitivities are red flags for Beverages and Food Products. Beverages revisions have also been slipping hard, and mutual fund overweights at 13-year highs contribute to crowding concerns for Food Products. Energy: Within the sector, we have a very slight preference for Energy Equipment & Services to Oil, Gas & Consumable Fuels. Valuations appear stretched for both industries, but our sentiment indicators suggest that Equipment & Services is more out of favor (sell-side net buy ratings and mutual fund overweights are starting to rise off 13 year lows), while these investor bases have made more of a re-engagement in Oil, Gas & Consumable Fuels. On revisions, momentum has been slightly stronger for Equipment & Services. Financials: Our indicators point to broad appeal across the Financials industries, matching our constructive view on the broader sector, but are most favorable for Diversified Financial Services, Insurance, Capital Markets, and Consumer Finance. These industries all have attractive valuation profiles, positive interest rate sensitivities, and ex Div d Services are in revisions uptrends with room to run. On top of these positives, Div d Services still appears deeply out of favor among both sell-side analysts and mutual funds, as does Insurance among sell-siders. Health Care: On balance, the HC industries screen close to neutral, in line with our view on the broader sector we do see more appeal in Providers & Services, and are less intrigued by Equipment & Supplies and Pharmaceuticals. Providers & Services jumps out for its sharply rebounding revisions, and looks neutral on the other metrics we track. Meanwhile, both Equipment & Supplies and Pharmaceuticals are in revisions downtrends with room left to fall before reaching past lows, and both are subject to crowding concerns, as there is lingering evidence of lack of capitulation on these groups on the sell-side. Industrials: Commercial Services & Supplies and Air Freight & Logistics look more intriguing on our scorecard, while Building Products and Transportation Infrastructure are most concerning. Both Commercial Services & Supplies and Air Freight & Logistics are in revisions uptrends with room left to run, and have shown positive interest rate sensitivity. Valuations are also attractive in Air Freight & Logistics, and look reasonable for Commercial Services & Supplies. Meanwhile, Building Products and Transportation Infrastructure both appear overvalued and are subject to broad-based crowding risks, and Building Products revisions have been deteriorating. Info Tech: Our indicators suggest that the most concerning Tech industries are Software, Semis, and Communications Equipment. All 3 industries appear extremely overvalued on our models, and are highly in favor among both sell-siders and mutual funds, arguing that they are at risk of crowding. In addition, Software revisions are sharply deteriorating, and the industry has shown modestly negative sensitivity to interest rates Software s negative score on all 4 of our metrics cause it to score lowest across all sectors on our methodology. Though Semis and Comm Equipment have shown positive interest rate sensitivity, this is not enough to offset their deep negatives on sentiment and valuation. Materials: While we have had concerns about the broader sector, at the industry level those concerns appear to be most concentrated in Chemicals and Construction Materials. In contrast, Metals & Mining scores more favorably. Chemicals and Containers & Packaging have both shown modestly negative correlations with 10 year yields, Chemicals valuations appear onerous on our model, and Containers & Packaging is subject to crowding risk (mutual fund overweights are at 13 year highs) along with deteriorating revisions trends. Meanwhile, Metals & Mining appears deeply underowned, with mutual fund overweights inflecting off 13 year lows, and revisions momentum has been accelerating again. Telecom: On balance, Diversified Telecom Services looks slightly more interesting than Wireless Telecom Services, though both have essentially neutral scores, in line with our take on the broader sector. While Div d Services scores neutral across all the metrics we track, Wireless Services is subject to a mix of reads it appears deeply underowned (especially among mutual funds) and has shown modestly positive interest rate sensitivity, but these positives are offset by onerous valuations. Utilities: While none of the industries within the broader sector screen as appealing (matching our concerns on the broader sector), our concerns are most concentrated in Gas and Multi-Utilities. Valuations appear onerous for both industries on our metrics, and both have shown negative sensitivity to rising interest rates. We do note that earnings revisions trends have been reaccelerating for Gas Utilities, but this positive is not enough to outweigh the industry s valuation and interest rates overhangs. 3

GICS Industries Ranked By US Equity Strategy Score The industries on the left are those our scorecard methodology scores most favorably, while the industries on the right are those where our methodology shows the most concerning scores. Insurance Metals & Mining Diversified Financial Services Capital Markets Air Freight & Logistics Consumer Finance Textiles, Apparel & Luxury Goods Specialty Retail Multiline Retail Personal Products Food & Staples Retailing Media Automobiles Commercial Services & Supplies Hotels, Restaurants & Leisure Road & Rail Health Care Providers & Services Professional Services Technology Hardware, Storage & Peripherals Life Sciences Tools & Services Biotechnology Leisure Products Electrical Equipment Household Durables Banks Electronic Equipment, Instruments & Components Internet Software & Services Paper & Forest Products Diversified Telecommunication Services Construction & Engineering Thrifts & Mortgage Finance Marine Industrial Conglomerates Independent Power and Renewable Electricity Producers Diversified Consumer Services Health Care Technology Construction Materials Household Products Aerospace & Defense Electric Utilities Airlines Wireless Telecommunication Services IT Services Water Utilities Pharmaceuticals Health Care Equipment & Supplies Tobacco Trading Companies & Distributors Machinery Energy Equipment & Services Distributors Oil, Gas & Consumable Fuels Auto Components Chemicals Communications Equipment Beverages Containers & Packaging Building Products Gas Utilities Multi-Utilities Semiconductors & Semiconductor Equipment Internet & Direct Marketing Retail Food Products Transportation Infrastructure Software US Equity Strategy Industry Rankings 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0 Source: CS US Equity Strategy 4

GICS Industries Ranked By Technical Strategy Score The industries on the left are those CS Technical Analysis scores most favorably, while the industries on the right are those where they give more negative scores. Insurance Diversified Financial Services Capital Markets Air Freight & Logistics Consumer Finance Specialty Retail Media Automobiles Commercial Services & Supplies Hotels, Restaurants & Leisure Road & Rail Health Care Providers & Services Professional Services Technology Hardware, Storage & Peripherals Life Sciences Tools & Services Biotechnology Electrical Equipment Household Durables Banks Electronic Equipment, Instruments & Components Internet Software & Services Paper & Forest Products Construction & Engineering Thrifts & Mortgage Finance Industrial Conglomerates Household Products Aerospace & Defense Electric Utilities Airlines IT Services Water Utilities Pharmaceuticals Health Care Equipment & Supplies Tobacco Trading Companies & Distributors Machinery Auto Components Chemicals Communications Equipment Building Products Gas Utilities Multi-Utilities Semiconductors & Semiconductor Equipment Internet & Direct Marketing Retail Software Metals & Mining Leisure Products Diversified Telecommunication Services Marine Independent Power and Renewable Electricity Producers Diversified Consumer Services Health Care Technology Construction Materials Beverages Containers & Packaging Food Products Transportation Infrastructure Textiles, Apparel & Luxury Goods Multiline Retail Personal Products Food & Staples Retailing Wireless Telecommunication Services Energy Equipment & Services Distributors Oil, Gas & Consumable Fuels CS Technical Analysis Industry Rankings 3.0 2.0 1.0 0.0-1.0-2.0-3.0 Source: CS Technical Analysis 5

Eq Strategy vs. Technical: Cross-Section Of Aligned Views The tables below highlight where favorable/unfavorable scores from the CS Technical Analysis team align with highly favorable/unfavorable scores from the US Equity Strategy team, overall and on individual metrics. Equity Strategy Favorable Scores Overall Scores (top 14) Revisions (strong uptrend) Valuations (deeply undervalued) Sentiment/Positioning (deeply out of favor) Positive Technical Scores Insurance Diversified Financial Svcs Capital Markets Air Freight & Logistics Consumer Finance Media Automobiles Specialty Retail Comm l Svcs & Supplies Automobiles HC Providers & Svcs Airlines Trading Comp & Distributors Specialty Retail Professional Services Tech HW, Storage & Periph Life Sciences Tools & Svcs Internet Software & Svcs Elect Eq, Instruments & Comp Industrial Conglomerates Tobacco Diversified Financial Svcs Household Products Equity Strategy Unfavorable Scores Overall Scores (bottom 14) Revisions (strong downtrend) Valuations (extremely overvalued) Sentiment/Positioning (extremely favored) Oil, Gas & Cons Fuels Distributors (Cons Disc) Energy Equipment & Svcs Wireless Telecom Services Food & Staples Retailing Negative Technical Scores Source: CS US Equity Strategy, CS Technical Analysis 6

Consumer Discretionary Industry Scorecard Within the broader Consumer Discretionary sector, Specialty Retail, Multiline Retail, Media, and Automobiles look more intriguing, while Internet & Direct Marketing Retail, Auto Components, and Distributors are least intriguing. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Scoring: Higher & positive is better than lower & negative Trend Score Composite of sell-side net buy and mutual fund % OW Z Scores Composite valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice Revisions/Earnings : Trends are most favorable for Auto Components, Autos, Hotels, Restaurants & Leisure, and Media (rising off recent lows with plenty of room to run). Trends have been in decline for Div d Cons Svcs, Leisure Products, and two Retail industries Multiline and Specialty. Valuations: Valuations are most compelling for Multiline Retail, Specialty Retail, Media, Hotel, Restaurants & Leisure, Leisure Products, and Textiles, Apparel & Luxury Goods, but appear elevated for Auto Components and Internet & Direct Marketing Retail. Investor Sentiment & Positioning: Crowding concerns are most pronounced for Internet & Direct Marketing Retail and Auto Components, and are also present for Distributors. Specialty Retail and Textiles, Apparel & Luxury Goods appear more out of favor. Economy/Interest Rates: Automobiles and Household Durables have displayed slight positive sensitivity to moves in the 10 year Treasury yield. On the flipside, Internet & Direct Marketing Retail, Distributors, and Textiles, Apparel & Luxury Goods have shown significant negative sensitivities to rates. Technical Analysis View: Positive technicals align with our favorable views toward Automobiles, Media, and Specialty Retail (although we think there is less agreement on the latter group than appears due to heavy weightings of big constituents like LOW and HD, and the equal weighted nature of out valuation work); negative technicals align with our unfavorable view toward Distributors. CS Technical Analysis Team Rating Auto Components 1-2 -1 0-0.6 2 Autos & Comps Automobiles 2 0 0 1 0.6 2 Household Durables 0 0 0 1 0.2 2 Leisure Products -1 0 1 0 0.2 0 Cons Dur & Appl Textiles, Apparel & Luxury Goods 0 1 2-2 0.6-2 Diversified Consumer Services -1 0 0 0-0.2 0 Cons Svcs Hotels, Restaurants & Leisure 1 0 1-1 0.4 2 Media Media 1 0 1 0 0.6 2 Distributors 0-1 0-2 -0.6-2 Internet & Direct Marketing Retail 0-2 -1-2 -1.2 2 Multiline Retail -1 0 2 0 0.6-2 Retailing Specialty Retail -1 1 2-1 0.6 2 Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Thomson Reuters, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (P/B, P/S, Norm P/E vs. the broader equity market for the groups within Autos & Components, P/B, Norm P/E, PEG, NTM P/CF for the groups within Cons Durables & Apparel, LTM P/E, NTM P/E, PEG for the groups within Cons Svcs, LTM P/E, P/B, NTM P/E for media, P/B, Norm P/E for the groups within Retailing) 7

Declining Improving Cons Disc EPS Revisions In Focus Our indicators point to improving revisions trends for Automobiles, Hotels, Restaurants & Leisure, and Media, but show deteriorating revisions trends for Multiline and Specialty Retail along with Leisure Products. Revisions momentum has been rising sharply for Automobiles and Media, and appears to be inflecting off post Financial Crisis lows for Hotels, Restaurants & Leisure. has been slipping with room to fall across Multiline Retail, Specialty Retail, and Leisure Products. All Cap Automobiles EPS Revisions 10 8 6 4 2 All Cap Hotels, Restaurants & Leisure EPS Revisions 8 7 6 5 4 3 2 1 All Cap Media EPS Revisions 7 6 5 4 3 2 1 All Cap Multiline Retail EPS Revisions 10 8 6 4 2 All Cap Specialty Retail Equipment EPS Revisions 8 7 6 5 4 3 2 1 All Cap Leisure Products EPS Revisions 8 7 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, IBES 8

In Favor Out Of Favor Cons Disc Ownership/Sentiment In Focus: Sell-Side Our sell-side indicator suggests that Multiline and Specialty Retail along with Textiles, App & Luxury Goods are deeply out of favor, while Internet & Dir Marketing Retail, Auto Components, and Media are more in favor. Sell-side net buy ratings vs. the broader market are at or approaching 13 year lows for Multiline Retail, Specialty Retail, and Textiles, Apparel & Luxury Goods. On the other hand, sell-side ratings are at historical highs for Internet Retail, and are elevated for Auto Components and Media. All Cap Multiline Retail Sell Side Bullishness 1 1 - -1-1 -2 All Cap Specialty Retail Sell Side Bullishness 1 1 - -1-1 All Cap Textiles Apparel & Lux Gds Sell Side Bullishness 1 1 - -1-1 All Cap Internet & Direct Marketing Retail Sell Side Bullishness 1 1 - -1-1 All Cap Auto Components Sell Side Bullishness 1 1 - -1-1 -2 All Cap Media Sell Side Bullishness 1 8% 6% 4% 2% -2% -4% -6% Source: CS US Equity Strategy, Capital IQ/ClariFi, Russell 9

Autos & Div d Cons Svcs Retail Industries Cons Disc Ownership/Sentiment In Focus: Mutual Funds Our mutual fund indicator points to highly elevated positioning among Distributors, Multiline Retail, Internet Retail, Auto Components, and Automobiles; Diversified Consumer Services appears deeply underowned. Mutual fund overweights are at or near 13 year highs for Distributors, Multiline Retail, Internet Retail, and Auto Components, and are also elevated vs. history for Automobiles. Meanwhile, overweights are at 13 year lows for Diversified Consumer Services. % of Funds Overweight Distributors 2 2 1 1 % of Funds Overweight Multiline Retail 5 4 3 2 1 % of Funds Overweight Internet & Direct Marketing Retail 4 3 2 1 % of Funds Overweight Auto Components 5 4 3 2 1 % of Funds Overweight Automobiles 3 3 2 2 1 1 % of Funds Overweight Div'd Cons Svcs 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, Russell 10

Consumer Staples Industry Scorecard Within the broader Consumer Staples sector, Food & Staples Retailing and Personal Products look more intriguing, while Food Products and Beverages are least intriguing. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Fd & Stpls Ret Food & Staples Retailing 1-2 2 0 0.6-2 Beverages -1 0-1 -2-1.0 0 Food Products 0-1 -2-1 -1.2 0 Fd Bev & Tob Tobacco 0 2-1 -2-0.4 2 Household Products -1 2-1 0-0.2 2 HH & Pers Prod Personal Products -1 0 2 0 0.6-2 Revisions/Earnings : Trends are most favorable for Food & Staples Retailing (inflecting from levels near past lows), and least favorable for Beverages, Household Products, and Personal Products (momentum has been slipping hard, but is starting to near past lows). Valuations: Valuations appear most onerous for Food Products, followed by Beverages and Tobacco. Food & Staples Retail and Personal Products valuations are most compelling. Investor Sentiment & Positioning: Lingering crowding concerns are most pronounced for Food & Staples Retail, followed by Food Products. On the flipside, Household Products and Tobacco appear deeply out of favor. Economy/Interest Rates: Beverages and Tobacco have displayed highly negative interest rate sensitivity (performance relative to the broader market tends to move in opposition to trends in 10 year Treasury yields), and Food Products has shown modestly negative sensitivity. Technical Analysis View: Interestingly, technicals are negative for the industries that look more interesting on our scorecard (Food & Staples Retail and Personal Products, where it is primarily valuations that the groups look more interesting than others), but positive for Tobacco and HH Products. Source: CS US Equity Strategy, CS Technical Analysis, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (Norm P/E & NTM EV/S vs. the broader equity market for the groups within Food & Staples Retail and Food Beverage & Tobacco, P/B & Norm P/E for the groups within Household & Personal Products) 11

Revisions Ownership Consumer Staples Industries In Focus Key Charts Our indicators point to several positioning extremes in Food Products, Beverages, and Household Products. On investor sentiment, mutual fund overweights are at 13 year highs for Food Products and Beverages, contributing to crowding concerns. In contrast, sell-side net buys have fallen to a new low for Household Products, suggesting they are deeply out of favor. On revisions, momentum has been stabilizing for Food Products, but is slipping toward past lows for Beverages and Household Products. Food & Staples Retail Beverages Household Products % of Funds Overweight Food Products 5 4 3 2 1 % of Funds Overweight Beverages 4 3 2 1 All Cap Household Products Sell Side Bullishness - -1-1 -2 All Cap Food Products EPS Revisions 7 6 5 4 3 2 1 All Cap Beverages EPS Revisions 7 6 5 4 3 2 1 All Cap Household Products EPS Revisions 8 7 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 12

Energy Industry Scorecard Within the Energy sector, Oil, Gas & Consumable Fuels looks less intriguing than Equipment & Services. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Energy Equipment & Services 1 1-2 0-0.4-2 Energy Oil, Gas & Consumable Fuels 0-1 -1 0-0.6-2 Revisions/Earnings : Revisions momentum has been on the rise for Equipment & Services, though it has started to decelerate a bit after nearing past highs. and bears watching. has stalled near post financial crisis highs for Oil, Gas & Consumable Fuels. Valuations: Valuations appear onerous for both industries. Investor Sentiment & Positioning: Equipment & Services appears more out of favor, than Oil, Gas & Consumable Fuels where a more meaningful re-engagement has already been underway. Economy/Interest Rates: Neither industry within Energy has shown significant sensitivity to interest rate trends (correlations between performance relative to the broader market and moves in 10 year Treasury yields have been close to 0). Technical Analysis View: Technicals are negative for both of the Energy industries, in sync with our valuation concerns on both groups. Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are NTM P/E vs. the broader equity market for both industries 13

Oil & Gas Equipment & Svcs Energy Industries Key Charts Our indicators suggest that Equipment & Services has a bit more appeal than Oil, Gas & Consumable Fuels. On positioning, Equipment & Services still appears out of favor, though sell-side net buys and mutual fund overweights are starting to rise off 13 year lows. Meanwhile, the sell-side and mutual funds have already re-engaged in Oil, Gas & Consumable Fuels. On revisions, momentum has been on the rise for Equipment & Services, though it has started to decelerate a bit after nearing past highs and bears watching. Oil, Gas & Consumable Fuels revisions have stalled. Sell-Side Ratings Mutual Fund Overweights Earnings Revisions All Cap Energy Equip & Svcs Sell Side Bullishness 2 2 1 1 - -1-1 % of Funds Overweight Energy Eq & Svcs 8 6 4 2 All Cap Energy Equip & Svcs EPS Revisions 10 8 6 4 2 All Cap Oil, Gas & Cons Fuels Sell Side Bullishness 1 1 - -1 % of Funds Overweight Oil, Gas & Cons 6 5 4 3 2 1 All Cap Oil, Gas & Cons Fuels EPS Revisions 10 8 6 4 2 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 14

Financials Industry Scorecard Digging deeper into the broader Financials sector, Diversified Financials Services, Insurance, Capital Markets, and Consumer Finance look more intriguing than Banks and Thrifts & Mortgage Finance. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Banks 0-1 0 2 0.2 2 Banks Thrifts & Mortgage Finance -2 0 0 2 0.0 2 Capital Markets 1 0 1 2 1.0 2 Consumer Finance 1 0 1 1 0.8 2 Div'd Fin Diversified Financial Services -1 2 1 2 1.0 2 Insurance Insurance 1 1 1 2 1.2 2 Revisions/Earnings : Earnings revisions trends are more intriguing for Capital Markets, Consumer Finance, and Insurance where trends have been rising off recent lows. Banks revisions are strong but have already hit new highs, and may be starting to decelerate. Thirfts & Mortgage Finance and Diversified Financial Svcs are falling on this metric. Valuations: Valuations are most compelling on Diversified Financial Services, followed by Insurance, Capital Markets, Consumer Finance, and Thrifts & Mortgage Finance. They appear more neutral on Banks. Investor Sentiment & Positioning: While there is some scope to be concerned about crowding risk in Banks, Diversified Financial Services and Insurance appear more out of favor. Economy/Interest Rates: All groups are positively correlated with moves in the 10 year Treasury yield, and seem likely to outperform if interest rates keep climbing higher. Technical Analysis View: Technicals are positive across all of the Financials industries, reinforcing our sense that the sector has broad appeal given attractive valuations and rising interest rates. Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (LTM P/E, P/B, NTM EV/S, NTM P/E vs. the broader equity market for the groups within Banks, LTM P/E, Norm P/E, NTM EV/S for the groups within Diversified Financials, and P/S, NTM EV/S for insurance) 15

Revisions Ownership Financials Industries In Focus Key Charts Consumer Finance, Capital Markets, and Diversified Financials Services appear intriguing. On investor sentiment, mutual fund overweights have risen to historical highs for Consumer Finance. But sell-side net buy ratings are near 13 year lows for Capital Markets and Div d Fin Services, as is the percent of mutual fund overweight for the latter. Revisions momentum has been on the rise for Consumer Finance and Capital Markets, but has room to run before hitting past highs. Revisions have been slipping off their recent highs for Div d Financial Svcs, the one potential point of concern we see for the group. Consumer Finance Capital Markets Div d Fin Services % of Funds Overweight Cons Finance 5 4 3 2 1 All Cap Capital Markets Sell Side Bullishness 1 - -1-1 All Cap Div'd Financial Svcs Sell Side Bullishness 1 1 - -1-1 All Cap Consumer Finance EPS Revisions 10 8 6 4 2 All Cap Capital Markets EPS Revisions 8 7 6 5 4 3 2 1 All Cap Div'd Financial Svcs EPS Revisions 8 7 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 16

Health Care Industry Scorecard Within the broader Health Care sector, Providers & Services, Biotech, and Life Sciences Tools & Services look more intriguing, while Equipment & Supplies and Pharmaceuticals are least intriguing. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Health Care Equipment & Supplies -1-1 0 0-0.4 2 Health Care Providers & Services 2 0 0 0 0.4 2 HC Eq & Svcs Health Care Technology 1-1 0-1 -0.2 0 Biotechnology 0 0 1-1 0.2 2 Life Sciences Tools & Services -2 0 2-1 0.2 2 Ph Bio & Life Sci Pharmaceuticals -1-1 0 0-0.4 2 Revisions/Earnings : Trends are most favorable for Providers & Services and HC Technology (positive inflection underway). Trends have been in sharp decline for Life Sciences & Services, and have also been slipping for Equipment & Supplies and Pharmaceuticals. Valuations: Valuations are attractive for Life Sciences Tools & Services and Biotech; they appear reasonable for the other industries. Investor Sentiment & Positioning: Modest crowding concerns persist for Equipment & Supplies, HC Technology, and Pharma. Although Providers & Svcs does not rank as being at risk of crowding, it is worth noting that the percent of mutual funds overweight is at past highs (sell-side net buys have fallen sharply, however, offsetting this risk). Economy/Interest Rates: Biotech, Life Sciences Tools & Services, and HC Technology have displayed slight negative interest rate sensitivity (performance relative to the broader market tends to move in opposition to trends in 10 year Treasury yields). Technical Analysis View: Technicals are positive across all of the Health Care industries, with the exception of HC Tech. Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (P/B & Norm P/E vs. the broader equity market for the groups within Equipment & Services, P/S for the groups within Pharma/Biotech) 17

Revisions Ownership Health Care Industries In Focus Key Charts We see lingering crowding risks in Equipment & Supplies, Biotech, and Pharma on the sell-side. On investor sentiment, sell-side net buy ratings vs. the broader market have been receding from 13 year highs for HC Equipment & Supplies, Biotech, and Pharma lingering evidence of lack of capitulation on these groups on the sell-side. Revisions momentum has been in sharp decline for Equipment & Supplies, but has started to near past lows. Pharma revisions have been gradually slipping. Biotech revisions had been in an uptrend, but they have started to decelerate after reaching the high end of their range. HC Equipment & Supplies Biotech Pharmaceuticals All Cap HC Equipment & Supplies Sell Side Bullishness 2 1 1 All Cap Biotechnology Sell Side Bullishness 2 2 1 1 All Cap Pharma Sell Side Bullishness 2 2 1 1 - -1 All Cap HC Equipment & Supplies EPS Revisions 6 5 4 3 2 1 All Cap Biotech EPS Revisions 7 6 5 4 3 2 1 All Cap Pharma EPS Revisions 7 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 18

Industrials Industry Scorecard Within the broader Industrials sector, Air Freight & Logistics and Commercial Services & Supplies look more intriguing, while Transportation Infrastructure and Building Products are least intriguing. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite of sell-side net buy and mutual fund % OW Z Scores CS Technical Analysis Team Rating Composite valuation Correlation w/ 10 yr Average, valuation is Trend Score model, rel to broad mkt yield since 2003 weighted twice Aerospace & Defense 1 1-1 -1-0.2 2 Building Products -1-2 -1 0-1.0 2 Construction & Engineering 0 0 0 0 0.0 2 Electrical Equipment 1 0 0 0 0.2 2 Industrial Conglomerates 1 2-2 1 0.0 2 Machinery 1 1-2 0-0.4 2 Trading Companies & Distributors 2-1 -1-1 -0.4 2 Commercial Services & Supplies 1 0 0 2 0.6 2 Professional Services -1 0 2-2 0.2 2 Air Freight & Logistics 1 0 1 1 0.8 2 Airlines 2-1 -1 0-0.2 2 Marine 0 1-1 1 0.0 0 Road & Rail 1 0 1-1 0.4 2 Transportation Infrastructure NA -2-2 0-1.5 0 Scoring: Higher & positive is better than lower & negative Cap Goods Comm'l & Prof Svcs Transports Revisions/Earnings : Trends are generally favorable for most groups within Industrials, but are most favorable for Airlines and Trading Companies & Distributors (rising off lows with ample room to run). Trends are less favorable for Building Products, and Professional Services (downtrends). Valuations: Valuations are most compelling for Professional Services followed by Air Freight & Logistics; valuations appear most onerous for most groups, especially for Industrial Conglomerates, Machinery, Marine, and Transportation Infrastructure. Investor Sentiment & Positioning: Crowding concerns are most pronounced for Building Products and Transportation Infrastructure, followed by Airlines and Trading Companies & Distributors; Industrial Conglomerates, Machinery, Aerospace & Defense, and Marine appear more out of favor. Economy/Interest Rates: Relative performance trends for Commercial Services & Supplies, Industrial Conglomerates, Air Freight & Logistics, and Marine have displayed positive correlations with moves in the 10 year Treasury yield. On the flipside, Professional Services, Aerospace & Defense, Trading Companies & Distributors, and Road & Rail have shown negative sensitivities to rates. Technical Analysis View: Technicals are positive across all of the Industrials industries, with the exception of Marine and Transportation Infrastructure. Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Thomson Reuters, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (P/B & NTM P/E vs. the broader equity market for the groups within Capital Goods, LTM P/E, NTM EV/S, NTM P/E, NTM P/CF for the groups within Commercial & Professional Services, P/S, NTM P/E, PEG, NTM P/CF for the groups within Transports. 19

Revisions Ownership Industrials: Cap Goods Industries In Focus Key Charts Several areas of Capital Goods still appear deeply out of favor in certain camps (Aerospace & Defenses and Machinery), but we see risks of crowding in Building Products among mutual funds. On positioning, sell-side net buys for Machinery are inflecting off 13 year lows, while the percent of mutual funds overweight Aerospace & Defense has slipped below its long term average. Meanwhile, mutual fund overweights are just off 13 year highs for Building Products. Revisions momentum has been in decline for Building Products, but has started to inflect positively for A&D and Machinery. Aerospace & Defense Machinery Building Products % of Funds Overweight Aerospace & Defense 6 5 4 3 2 1 All Cap Machinery Sell Side Bullishness 1 - -1-1 -2 % of Funds Overweight Building Products 5 4 3 2 1 All Cap Aerospace & Defense EPS Revisions 7 6 5 4 3 2 1 All Cap Machinery EPS Revisions 10 8 6 4 2 All Cap Building Products EPS Revisions 10 8 6 4 2 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 20

Revisions Ownership Industrials: Transports Industries In Focus Key Charts We see signs of crowding in Airlines and Road & Rail among mutual funds. On positioning, mutual fund overweights have climbed to historical highs for Airlines and are close to them for Road & Rail. But sell-side net buy ratings are near 13 year lows for Road & Rail, pointing to a split opinion. Sell-side net buys and mutual fund overweights are also extremely low for Marine. Revisions momentum has been in a strong uptrend for Airlines and Road & Rail, with room to run, but has been falling for Marine. Airlines Marine Road & Rail % of Funds Overweight Airlines 5 4 3 2 1 All Cap Marine Sell Side Bullishness 5 4 3 2 1-1 -2-3 % of Funds Overweight Road & Rail 6 5 4 3 2 1 All Cap Airlines EPS Revisions 10 8 6 4 2 All Cap Marine EPS Revisions 6 5 4 3 2 1 All Cap Road & Rail EPS Revisions 10 8 6 4 2 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 21

Information Technology Industry Scorecard Within the broader Tech sector, Software, Semis, and Comm Equipment appear least favorable, while Tech HW Storage & Peripherals and Electronic Equipment appear most interesting. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Semis & Semi Equip Semiconductors & Semiconductor Equipment 0-2 -2 1-1.0 2 Internet Software & Services -2-2 2 0 0.0 2 IT Services 0-2 1-2 -0.4 2 Software & Services Software -2-2 -2-1 -1.8 2 Communications Equipment 0-2 -2 2-0.8 2 Electronic Equipment, Instruments & Components 1 2-2 2 0.2 2 Tech HW & Eq Technology Hardware, Storage & Peripherals -1 0 2-2 0.2 2 Revisions/Earnings : Trends neutral most of the groups, but negative for Internet, Software, and Hardware, Storage & Peripherals (slipping hard off recent peaks). The one group that is rising with room to run on this indicator is Electronic Equip, Inst & Comps. Valuations: Valuations appear onerous for Semis, Software, Communications Equipment, and Electronic Equipment, Instruments & Components; valuations look compelling for Internet Software & Services, Hardware, Storage & Peripherals, and IT Services. Investor Sentiment & Positioning: Crowding concerns persist in most industries, but are most pronounced in Semis, Internet Software & Services, IT Services, Software, and Communications Equipment. Electronic Equipment, Instruments & Components appears deeply unloved, especially on the sellside. Economy/Interest Rates: IT Services, Software, and Hardware, Storage & Peripherals have displayed negative interest rate sensitivity (performance relative to the broader market tends to move in opposition to trends in 10 year Treasury yields); Communications Equipment, Electronic Equipment, Instruments & Components, and Semis have shown positive interest rate sensitivity. Technical Analysis View: Technicals are positive across all of the Technology industries, contrary to our scores where valuations and crowding tend to be concerns. Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (P/B vs. the broader equity market for the groups within Semis and Tech Hardware & Equipment, P/S & NTM P/E for the groups within Software & Services) 22

Revisions Ownership Tech Industries In Focus Key Charts We see lingering crowding risks in most Tech industries, including Internet, Software, and Comm Equipment. On positioning, sell-side net buy ratings have surged to new 13 year highs for Software, while mutual fund overweights are also elevated. For Internet and Communications Equipment, mutual fund overweights have also climbed to historical highs, while sell-side net buys are also elevated. Revisions momentum has begun to decelerate sharply for Internet. Software revisions have been slipping toward past lows. Communications Equipment revisions have been in an uptrend but may be topping out near past highs. Internet Software & Services Software Communications Equipment % of Funds Overweight Int Soft & Svcs 5 4 4 3 3 2 2 All Cap Software Sell Side Bullishness 16% 14% 12% 1 8% 6% 4% 2% % of Funds Overweight Com Equip 6 5 4 3 2 1 All Cap Internet Software & Services EPS Revisions 7 6 5 4 3 2 1 All Cap Software EPS Revisions 7 6 5 4 3 2 1 All Cap Communications Equipment EPS Revisions 8 7 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 23

Materials Industry Scorecard Within the Materials sector, Metals & Mining looks most favorable, while Chemicals and Containers & Packaging (which have negative interest rate sensitivity) appear least favorable. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Chemicals 1 0-2 -1-0.8 2 Construction Materials 0-2 0 1-0.2 0 Containers & Packaging -1-1 -1-1 -1.0 0 Metals & Mining 1 2 1 0 1.0 0 Materials Paper & Forest Products -1 1 0 0 0.0 2 Revisions/Earnings : Earnings revisions trends appear to be inflecting upward for Chemicals and Metals & Mining, but have been deteriorating for Containers & Packaging and Paper & Forest Products. Valuations: Valuations appear onerous for Chemicals, but are in line with their historical average for the other industries. Investor Sentiment & Positioning: Ex Construction Materials, our sell-side net buy indicator is low across the board for the groups within this sector. When we factor in mutual fund positioning, we come away with crowding concerns in Construction Materials and Containers & Packaging (where the percent of funds overweight is extremely elevated). But our work suggests that Metals & Mining and Paper & Forest Products are underowned. Chemicals stakes in mutual funds are in line with their historical average. Economy/Interest Rates: Chemicals and Containers & Packaging have shown modestly negative correlations with moves in the 10 year Treasury yield, suggesting that they may be at risk of underperforming if interest rates keep climbing higher; Construction Materials has shown a positive correlation with the 10 year yield. Technical Analysis View: Technicals are positive for Chemicals (an industry we disfavor) and Paper & Forest Products (our view is neutral). Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (LTM P/E, P/B, P/S, NTM EV/S, NTM P/E vs. the broader equity market for all industries) 24

Revisions Ownership Materials Industries In Focus Key Charts Our indicators point to crowding concerns in Containers & Packaging, but suggest that Metals & Mining may be underowned. On investor sentiment, mutual fund overweights are at a 13 year high for Containers & Packaging, but near 13 year lows for Metals & Mining, suggesting the industry is deeply out of favor. Mutual fund overweights on Chemicals are in line with their long term average. Revisions momentum has been deteriorating for Containers & Packaging, but is accelerating again for Chemicals and Metals & Mining. Chemicals Containers & Packaging Metals & Mining % of Funds Overweight Chemicals 6 5 4 3 2 1 % of Funds Overweight Containers & Packaging 5 4 3 2 1 % of Funds Overweight Metals & Mining 6 5 4 3 2 1 All Cap Chemicals EPS Revisions 7 6 5 4 3 2 1 All Cap Containers & Packaging EPS Revisions 10 8 6 4 2 All Cap Metals & Mining EPS Revisions 10 8 6 4 2 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 25

Telecommunications Industry Scorecard Within the Telecom sector, Diversified Telecom Services looks slightly more interesting than Wireless Telecom Svcs. Industry Group Industry Revisions Investor Sentiment Valuation Economics Overall Score Technicals Composite Scoring: Higher & positive is better than lower & negative Trend Score Composite of sellside net buy and mutual fund % OW Z Scores valuation model, rel to broad mkt Correlation w/ 10 yr yield since 2003 Average, valuation is weighted twice CS Technical Analysis Team Rating Diversified Telecommunication Services 0 0 0 0 0.0 0 Tel Svcs Wireless Telecommunication Services 0 2-2 1-0.2-2 Revisions/Earnings : Revisions momentum has slipped off recent highs and stalled for both industries. Valuations: Valuations appear onerous for Wireless Telecom Services, but close to fair value for Diversified Telecom Services. Investor Sentiment & Positioning: Positioning is mixed for Diversified Telecom Services, but Wireless Telecom Services appears deeply out of favor. Economy/Interest Rates: Wireless Telecom Services has shown modestly positive sensitivity to interest rate trends (performance relative to the broader market has been positively correlated with moves in 10 year Treasury yields). Technical Analysis View: Technicals are negative for Wireless Telecom Services, an group that also looks overvalued on our work. Source: CS US Equity Strategy, S&P Capital IQ Clarifi, Compustat; Morningstar, IBES; z scores are based on time series built on all cap universes of the specified groups, valuation time series are equal weighted (LTM P/E & P/B vs. the broader equity market for both industries) 26

Wireless Telecom Svcs Div d Telecom Svcs Telecom Industries Key Charts Our indicators suggest that Wireless Telecom Services is deeply out of favor, while positioning/sentiment is mixed for Diversified Telecom Services. On investor sentiment, sell-side net buys are low for both groups. Mutual fund OWs are elevated vs. history for Div d Svcs. In contrast, MF OWs are at 13 year lows for Wireless Svcs. On revisions, momentum has slipped off recent highs and stalled for both industries. Sell-Side Ratings Mutual Fund Overweights Earnings Revisions All Cap Div'd Telecom Svcs Sell Side Bullishness 1 - -1-1 -2-2 % of Funds Overweight Diversified Telecom Svcs 4 3 2 1 All Cap Div'd Telecom Svcs EPS Revisions 8 7 6 5 4 3 2 1 All Cap Wireless Telecom Sell Side Bullishness 2 2 1 1 - -1-1 % of Funds Overweight Wireless Telecom Svcs 6 5 4 3 2 1 All Cap Wireless Telecom Svcs EPS Revisions 7 6 5 4 3 2 1 Source: CS US Equity Strategy, Capital IQ/ClariFi, Morningstar, IBES, Russell 27