Global Market Outlook – Cyclical Risks, Secular Potential

TIM HAYES, CMT Chief Global Investment Strategist

Ned Davis Research Group

Generate Alpha. Identify Risk. October 2018 Choose Ned Davis Research. Secular bull market in stocks, secular turning point in bonds?

Asset Classes & Secular Trends Monthly Data 1900-01-31 to 2018-09-30 (Log Scale) 10,000 BULL BEAR BULL BEAR BULL BEAR BULL BEAR BULL 10,000 Per Annum Returns: 3,162 7.6% -2.6% 21.2% -10.2% 11.0% 1.0% 16.0% -6.1% 15.1% 3,162

1,000 1,000

316 S&P 500 Monthly Average Price Index (2018-09-30 = 2902) 316

100 S&P 500 Gain/Annum 100 During Secular Trends 32 GPA %Time 32 Secular Bull 13.8 54.5 10 Secular Bear -4.0 45.3 10

Source: S&P Dow Jones Indices 15.0 BEAR BULL BEAR BULL 15.0 Per Annum Change in Yields: 2.7% -4.9% 5.0% -4.1% 12.5 12.5

Long-Term Gov't Bond Yields 10.0 During Secular Trends 10.0 Yields of Long-Term Government Bonds GPA %Time 7.5 (2018-09-30 = 3.0) Secular Bull -4.4 48.8 7.5 Secular Bear 4.2 51.2 5.0 5.0

2.5 2.5

Sources: Prior to 1919 - A History of Interest Rates by Sidney Homer & Richard Sylla (Annual Average) From 1919 to Present - Federal Reserve (Annual Close) BULL BEAR BULL BEAR BULL BEAR BULL 1,778 5.4% -7.4% 7.8% -3.2% 10.6% -3.1% 11.4% 1,778

1,000 1,000 NDR Commodity Composite* 562 (2018-09-30 = 1064) 562

NDR Commodity Index 316 During Secular Trends 316 GPA %Time 178 178 Secular Bull 8.4 52.9 Secular Bear -4.4 40.7 100 100 *Constructed using prices by George F. Warren & Frank A. Pearson, Bureau of Labor Statistics, Commodity Research Bureau(www.crbtrader.com) 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 S0202I © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 1 Cyclical bull intact but extended.

MEDIANS IN SECULAR BULLS

DJIA Secular Bull Market Comparison CYCLICAL BULLS: 77%, 2.4 YEARS 501 501 Secular Bull Starting in 1921 398 CYCLICAL BEARS: -19%, 8 MONTHS 398 316 316 251 251 200 200 158 158 126 Secular Bull Ended in 1929 126 100 100 79 79 64.9% -18.6% 344.5% 282 Secular Bull Starting in 1942 282 251 251 224 224 200 200 178 178 158 1951 158 141 141 126 Secular Bull Ended in 1966 126 112 112 100 128.7% -23.2% 18.4% -16.3% 100 3,981 Secular Bull Starting in 1982 3,981 3,162 3,162 2,512 2,512 1,995 1,995 1992 1,585 1,585 1,259 Secular Bull Ended in 2000 1,259 1,000 1,000 65.7% -15.6% 150.6% -36.1% 72.5% -21.2% 31,623 Secular Bull Starting in 2009 31,623 25,119 25,119 19,953 19,953 15,849 15,849 2018-10-11 12,589 Shaded areas represent NDR- 12,589 10,000 defined cyclical bear markets 10,000 7,943 7,943 95.7% -16.8% 71.9% -14.5% 60.0% Source: S&P Dow Jones Indices 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 S0202A © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 2 Will next move be a downgrade to underweight?

NDR Global Stock/Bond/Cash Recommendations Daily Data 2005-07-29 to 2018-10-11 Equity Line Based on NDR Global Recommendations (2018-10-11 = 223.41) Benchmark Equity Line (55/35/10 Stocks/Bonds/Cash) (2018-10-11 = 195.14)

200 200 158 158 126 126 100 100

Recommended Equity % (2018-10-11 = 55%)

60 60

40 40

20 Equity Benchmark Weight = 55% Source: Ned Davis Research, Inc. 20 Recommended Bond % (2018-10-11 = 35%)

40 40

20 20

Bond Benchmark Weight = 35% Source: Ned Davis Research, Inc. Recommended Cash % (2018-10-11 = 10%)

20 20

10 10

0 0 Cash Benchmark Weight = 10% Source: Ned Davis Research, Inc. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Model vs. Benchmark Returns

Allocation recommendations follow I4000 prior Full History: 2005-07-29 - 2018-10-11 to 2008 and I04000 from 1/1/2008 to 6/4/2009. Equity Line Gain/Annum For more details clliick here.. Recommendations 6.3% Benchmark 5.2%

I4001A

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 3 Divergent breadth consistent with past bear markets.

MSCI Equal-Weighted ACWI/Cap-Weighted ACWI Daily Data 2006-12-29 to 2018-10-11 (Log Scale) Equal-Weighted MSCI ACWI* 3,981 200-Day Moving Average 3,981 3,162 3,162 2,512 2,512 1,995 1,995 1,585 1,585 1,259 1,259 * MSCI ACWI Constituents Weighted Equally With Quarterly Rebalancing 700 700 Cap-Weighted MSCI ACWI YELLOW = 200-Day Moving Average 600 CYCLICAL BEARS 600 AND SINCE 500 JANUARY HIGH 500 400 400

300 300

200 200

700 Equal-Weighted ACWI/ Cap-Weighted ACWI 700 200-Day Moving Average 675 675 650 650 625 625 600 600 575 575 550 550

525 Moving average direction based on reversals of 0.5% or greater Source: MSCI 525 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Full History Statistics Chart View Statistics from 1998-12-31 from 2006-12-29 MSCI Cap-Weighted ACWI MSCI Cap-Weighted ACWI (2nd Clip) Gain/Annum When: (2nd Clip) Gain/Annum When: EW/CW ACWI % Gain/ % EW/CW ACWI % Gain/ % 200-Day MA: Annum of Time 200-Day MA: Annum of Time Is Rising 5.72 55.78 Is Rising 6.11 35.64 * Is Falling -0.64 44.22 * Is Falling 1.17 64.36

I138E © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 4 Most markets in downtrends.

MSCI All Country World Index vs. 200-Day Moving Average Indicators Daily Data 2006-12-29 to 2018-10-11 MSCI ACWI (2018-10-11 = 570.52)

501 501

398 398

316 316

251 251

200 200 Source: MSCI Percentage of 47 ACWI Markets Above 200-Day Moving Averages(2018-10-11 = 10.6%)

80 80

60 60

40 40

20 20

0 0 Percentage of 47 ACWI Markets With Rising 200-Day Moving Averages(2018-10-11 = 46.8%)

80 80

60 60

40 40

20 20

0 0 Moving average direction based on reversals of 0.5% or greater Source: MSCI 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MSCI ACWI Performance MSCI ACWI Performance Middle Clip: 2006-12-29 to 2018-10-11 YELLOW = CYCLICAL BEARS Bottom Clip: 2006-12-29 to 2018-10-11 % Above 200-Day Moving % Gain/ % of AND SINCE JANUARY HIGH % With Rising 200-Day % Gain/ % of Average is Annum Time Moving Average is Annum Time Above 50.0 4.65 67.05 Above 50.0 6.58 70.42 Below 50.0 -0.58 32.95 Below 50.0 -5.36 29.58 Buy/Hold = 2.90% Gain/Annum Buy/Hold = 2.90% Gain/Annum

CI138Bustomized version of GLOBAL_INT_CHART_TEST2

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 5 Rally Watch warned of weakness.

Global Stocks vs. Rally Watch Indicators Daily Data 1981-07-02 to 2018-10-11 (Log Scale) Source: MSCI 631 MSCI ACWI* 631 501 501 398 398 316 316 251 251 200 200 158 158 ACWI X-Month Performance Following Initial** 126 Drop to 0% Bullish Indicators 126 3-Month 6-Month 9-Month 12-Month 100 1981-07-02 -8.5 -4.9 -9.6 -14.5 100 Full History Statistics 79 1983-10-18 4.9 4.0 -2.9 7.1 79 MSCI ACWI Performance 1987-10-23 -5.2 4.8 6.8 11.1 63 % Gain/ % of 63 % Bullish Indicators: 1990-01-26 -7.1 -2.5 -18.2 -16.8 Annum Time 1994-06-24 2.6 1.1 -3.1 3.8 50 Above 50 17.60 17.47 50 1998-07-24 -11.8 -0.4 11.4 12.0 40 Between 15 and 50 9.73 56.26 40 2000-04-12 0.6 -10.2 -12.3 -19.3 Between 7 and 15 12.85 10.40 2008-03-25 -0.4 -11.2 -35.6 -38.2 32 * 7 and Below -14.87 15.87 32 2015-06-05 -9.8 -4.0 -9.0 -6.2 25 25 2018-06-29 - - - - 20 * MSCI World Index price returns used prior to 1988, MSCI ACWI price returns used thereafter. Median -5.2 -2.5 -9.0 -6.2 20 ** First 0% reading in at least a year from previous 0% reading Percent of Bullish Rally Watch Indicators 2018-10-11 = 6% 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Source: Ned Davis Research, Inc. 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 I55I © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 6 Keep an eye on Bear Watch report.

Maximum Drawdowns in Global Stocks vs. Bear Watch Indicators Daily Data 1985-10-07 to 2018-10-11 Global Stock Price Index** (2018-10-11 = 1,750.83)

1,585 1,585 1,259 1,259 1,000 1,000 794 794 631 631 501 501 398 398 316 316 251 251

200 -8.8 -18.5 -23.8 -34.0 -20.4 -47.2 -20.4 -14.9 200 158 ** MSCI World Index price returns used prior to 1988, MSCI ACWI price returns used thereafter. Source: MSCI 158 Percentage of Bearish Indicators in Bear Watch Report(2018-10-11 = 30.00)

80 80

70 70

60 60

50 50

40 40

30 30

20 20

10 10

0 0 Source: Ned Davis Research, Inc. 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Bearish signals (vertical dashed lines) = Percent bearish indicators crosses above 40% for Number of Analysis Median Median Drawdown Length Median Length to Drawdown the first time in at least six consecutive months. Cases Start Date Drawdown (Calendar Days) (Calendar Days) Shaded periods = maximum drawdown periods 8 1985-10-07 -20.4 118 26 for the 12 months following bearish signals.

I90B

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 7 Spiking VIX would be a bad sign.

Global Stocks vs. S&P 500 Volatility Index (VIX) Daily Data 2014-12-23 to 2018-10-11 Global Stock Price Index** (2018-10-11 = 1,750.83) Bearish Signal on 2018-02-05 1,995 Max Drawdown Since Signal: -6.9% 1,995 1,905 1,905 1,820 1,820 1,738 1,738 1,660 1,660 1,585 1,585 1,514 1,514 1,445 1,445 1,380 1,380 1,318 1,318 1,259 1,259 -14.9 1,202 1,202 ** MSCI ACWI price returns Source: MSCI S&P 500 Volatility Index (VIX) (2018-10-11 = 24.98) 40 40 CHINA

35 35 TRADE WAR 30 RATES, XIV 30 OIL, BANKS 25 BREXIT 25 KOREA 20 TRUMP 20

15 15

10 10 Source: Chicago Board Options Exchange, Incorporated. www.cboe.com Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2015 2016 2017 2018

Bearish signals (vertical dashed lines) = VIX crosses above 28.5 for the first Number of Analysis Median Median Drawdown Length Median Length to Drawdown time in at least six consecutive months. Cases Start Date Drawdown (Calendar Days) (Calendar Days) Shaded periods = maximum drawdown periods 6 1990-01-02 -22.0 118 53 for the 12 months following bearish signals.

Customized version of I87

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 8 More Tech relative weakness and Utilities relative strength?

MSCI ACWI Information Technology/ACWI Daily Data 2017-10-11 to 2018-10-11 (Log Scale) MSCI ACWI Utilities/ACWI Daily Data 2017-10-11 to 2018-10-11 (Log Scale) 0.426 MSCI ACWI Information Technology/ACWI 0.250 MSCI ACWI Utilities/ACWI 0.423 MSCI All Country World Index (Local Currency) 624 0.246 MSCI All Country World Index (Local Currency) 624 0.419 0.243 0.416 617 617 0.240 0.412 610 0.237 610 0.409 0.234 0.405 603 MSCI ACWI 603 MSCI ACWI 0.231 0.402 596 596 0.398 0.228 0.395 589 0.225 589 0.391 582 0.222 582 0.388 0.219 575 575 0.384 MSCI ACWI Utilities/ACWI 0.216 0.381 569 0.212 569 0.377 0.209 MSCI ACWI Information Technology/ACWI 0.374 562 562 0.371 Source: MSCI 0.206 Source: MSCI

0.500 Rolling 260-day correlation of daily returns between MSCI ACWI Information Technology/ACWI & MSCI ACWI (Local Currency) 0.500 -0.400 -0.400 Median 0.475 0.475 -0.425 -0.425 0.450 0.450 -0.450 -0.450 0.425 0.425 0.400 0.400 -0.475 -0.475 0.375 0.375 -0.500 -0.500 0.350 0.350 0.325 0.325 -0.525 -0.525 0.300 0.300 -0.550 -0.550 0.275 0.275 0.250 0.250 -0.575 -0.575 0.225 0.225 -0.600 -0.600 0.200 0.200 0.175 0.175 -0.625 -0.625 0.150 0.150 Rolling 260-day correlation of daily returns between MSCI ACWI Utilities/ACWI & MSCI ACWI (Local Currency) -0.650 -0.650 0.125 0.125 Median 16 25 03 14 23 04 13 22 02 11 22 31 09 20 01 12 21 30 10 19 30 09 18 29 07 18 27 06 17 26 06 15 24 04 13 24 03 12 16 25 03 14 23 04 13 22 02 11 22 31 09 20 01 12 21 30 10 19 30 09 18 29 07 18 27 06 17 26 06 15 24 04 13 24 03 12 Oct '17 Nov '17 Dec '17 Jan '18 Feb '18 Mar '18 Apr '18 May '18 Jun '18 Jul '18 Aug '18 Sep '18 Oct '18 Oct '17 Nov '17 Dec '17 Jan '18 Feb '18 Mar '18 Apr '18 May '18 Jun '18 Jul '18 Aug '18 Sep '18 Oct '18 Correlation Period: 20 50 130 260 Date Range (years): 1 2 3 5 10 20 Max Correlation Period: 20 50 130 260 Date Range (years): 1 2 3 5 10 20 Max ICS_16.RPT ICS_16.RPT © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 9 Also watch correlations between stocks and bond yields.

MSCI U.S. & 10-Year Government Bond Yield One-Year Correlation Daily Data 1970-12-30 to 2018-10-11 (Log Scale) Global Stock/Bond Yield Correlation Daily Data 1982-09-17 to 2018-10-11 (Log Scale) MSCI U.S. Index Source: MSCI 1,778 Global Stock Price Index* 1,778 3,162 3,162 1,778 1,778 1,000 1,000 1,000 1,000 562 562 562 562 316 316 316 316 178 178 178 178 100 100 *MSCI World Index price returns used prior to 1988, MSCI All Country World Index price returns used thereafter Source: MSCI 56 56 10 10 U.S. 10-Year Government Bond Yield (2018-10-11 = 3.14%) Source: Haver Analytics 9 9 15.0 15.0 8 8 7 7 12.5 12.5 6 6 10.0 10.0 5 5 4 4 7.5 7.5 3 3 2 2 5.0 5.0 1 Global Aggregate Bond Yield (2018-10-11 = 1.6%) 1 2.5 2.5 0 Source: Barclays 0 1.00 Rolling 60-Day Correlation Stock Prices and Bond Yields Moving in Same Direction 1.00 Daily % Change of Global Stock Index & Global Bond Yield 0.75 0.75 Rolling One-Year Correlation Stock Prices and Bond Yields Moving in Same Direction 2018-10-11 = 0.28 (2018-10-11 = 0.15) 0.75 Daily % Change MSCI U.S. Index & Point Change of 10-Year Gov't Bond Yield 0.75 0.50 0.50

0.50 0.50 0.25 0.25 0.00 0.00 0.25 0.25 -0.25 -0.25 0.00 0.00 -0.50 -0.50 -0.25 -0.25 -0.75 Stock Prices and Bond Yields Moving in Opposite Directions -0.75 -0.50 -0.50 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Date Range (years): -0.75 Stock Prices and Bond Yields Moving in Opposite Directions -0.75 Correlation Period (market days): 1975 1980 1985 1990 1995 2000 2005 2010 2015 30 60 130 260 1 2 3 5 10 Max ICS_34 I278 © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 10 Stocks most expensive in U.S.

MSCI ACWI vs. ACWI Median Earnings Yield Monthly Data 1994-05-31 to 2018-09-30 MSCI U.S. vs. U.S. Median Earnings Yield Monthly Data 1994-05-31 to 2018-09-30 MSCI All Country World Index in Local Currency(2018-09-30 = 610.48) MSCI U.S. Index in Local Currency(2018-09-30 = 2,775.55)

562 562 2,512 2,512

501 501 1,995 1,995 447 447 1,585 1,585 398 398 355 355 1,259 1,259 316 316 1,000 1,000 282 282 251 251 794 794

224 224 631 631 200 200 501 501 178 178 158 158 398 398 Source: MSCI Source: MSCI MSCI ACWI Median Earnings Yield (Constituent Basis) (2018-09-30 = 5.7%) MSCI U.S. Median Earnings Yield (Constituent Basis) (2018-09-30 = 4.2%) Undervalued Undervalued +4 SD 9.5 9.5 8.0 8.0 +5 SD 9.0 9.0 7.5 +3 SD 7.5 8.5 +4 SD 8.5 7.0 7.0 8.0 8.0 +2 SD +3 SD 6.5 6.5 7.5 7.5 6.0 6.0 7.0 +2 SD 7.0 +1 SD 6.5 6.5 5.5 5.5 6.0 +1 SD 6.0 5.0 Median 5.0 5.5 5.5 Median 4.5 4.5 5.0 5.0 -1 SD 4.0 4.0 4.5 -1 SD 4.5 3.5 -2 SD 3.5 4.0 4.0 -2 SD 3.0 3.0 3.5 Overvalued Source: Ned Davis Research, Inc. 3.5 Overvalued Source: Ned Davis Research, Inc. 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

ICS_38A ICS_38C

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 11 Fewer positive earnings revisions – earnings warning?

Monthly Data 2002-04-30 to 2019-09-30 MSCI U.S. Trailing Earnings and % of Companies with Positive Earnings Revisions Monthly Data 2002-04-30 to 2019-09-30 MSCI All Country World Trailing Earnings and % of Companies with Positive Earnings Revisions 105% 90% 39.0 Source: IBES and MSCI 102% Positive Revisions (%) Shifted Forward by 12 Months (2019-09-30 = 81.6%) (Left-Axis) 140.0 Source: IBES and MSCI 88% Positive Revisions (%) Shifted Forward by 12 Months (2019-09-30 = 73.1%) (Left-Axis) 38.0 100% MSCI U.S. Trailing 12-Month Earnings (2018-09-30 = 122.0) (Right-Axis) 135.0 MSCI All Country World Trailing 12-Month Earnings (2018-09-30 = 33.1) (Right-Axis) 37.0 98% Series based on local currency inputs 85% Series based on local currency inputs 36.0 95% 130.0 82% 35.0 92% 125.0 80% 34.0 90% 78% 33.0 88% 120.0 75% 32.0 85% 115.0 31.0 82% 73% 110.0 30.0 80% 70% 29.0 78% 105.0 68% 75% 28.0 100.0 65% 27.0 73% 95.0 62% 26.0 70% 68% 90.0 60% 25.0 24.0 65% 58% 85.0 23.0 62% 55% 60% 80.0 22.0 58% 52% 21.0 75.0 55% 50% 20.0 52% 70.0 48% 19.0 50% 65.0 18.0 45% 48% 17.0 60.0 43% 45% 16.0 43% 55.0 40% 15.0 40% 38% 14.0 50.0 38% 13.0 45.0 35% 35% 12.0 32% 32% 40.0 11.0 30% 30% 10.0 35.0 28% 28% 9.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ICS_27A.RPT ICS_27A.RPT © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 12 Watch the earnings beat rates – as good as it gets?

Quarterly Data 1995-03-31 to 2018-06-30 (Log Scale) Quarterly Data 1995-06-30 to 2018-06-30 (Log Scale) MSCI ACWI vs Percentage of Earnings Reports Beating Expectations MSCI United States vs Percentage of Earnings Reports Beating Expectations 631 MSCI ACWI 631 MSCI United States 2,512 2,512 501 501 1,995 1,995 398 398 1,585 1,585 316 316 1,259 1,259 251 251 1,000 1,000

200 200 794 794 Source: MSCI 631 631 Median Quarter Ending 2018-06-30 = 61.4% 80 Percentage of Earnings Reports Beating Expectations 80 Source: MSCI Percentage of Earnings Reports Beating Expectations Median Quarter Ending 2018-06-30 = 80.0% 75 75 85 85 70 70 80 80 65 65 75 75

60 60 70 70

55 55 65 65 50 50 Source: Thomson I/B/E/S 60 60 15 Year-over-Year Point Change 2018-06-30 = 0.1 15 55 55 10 10 Source: Thomson I/B/E/S 20.0 Year-over-Year Point Change 2018-06-30 = 5.6 20.0 5 5 17.5 17.5 15.0 15.0 0 0 12.5 12.5 -5 -5 10.0 10.0 7.5 7.5 -10 -10 5.0 5.0 2.5 2.5 0.0 0.0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 -2.5 -2.5 MSCI ACWI Gain/Annum When: -5.0 -5.0 Y/Y Point Change % Gain/ % of -7.5 -7.5 in Earnings Surprise % (Clip 3): Annum Time -10.0 -10.0 * Above 0 7.93 56.98 -12.5 -12.5 0 and Below 2.67 43.02 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 ICS_27E ICS_27E © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 13 Risk is cyclical, not secular. Long-term reflation trend intact.

Asset Class Relative Strength II Monthly Data 1945-01-31 to 2018-09-28 (Log Scale) 100 S&P 500 Total Return Index / S&P Long-Term Government Bond Total Return Index 100 12-Month Moving Average 56 56 32 32 18 INFLATION 18 10 10 5 REFLATION DISINFLATION REFLATION 5 2 2 1 DEFLATION 1 0 0 Source: S&P Dow Jones Indices & Standard & Poor's 100 S&P 500 Total Return Index / NDR Commodities Composite* 100 12-Month Moving Average 56 56 32 32 18 18 10 10 5 5 2 2 1 1

0 Source: S&P Dow Jones Indices 0 -1 *Constructed using prices by Bureau of Labor Statistics and Commodity Research Bureau (www.crbtrader.com) -1 S&P Long-Term Government Bond Total Return Index / NDR Commodities Composite* 1.4 12-Month Moving Average 1.4

1.1 1.1

0.9 0.9

0.6 0.6

0.5 0.5

0.3 0.3 Source: Standard & Poor's 0.1 *Constructed using prices by Bureau of Labor Statistics and Commodity Research Bureau (www.crbtrader.com) 0.1 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 AA032E © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 14 Relative valuations support secular outlook for stocks, not bonds.

Global Growth-Adjusted Relative Valuation Monthly Data 1997-01-31 to 2018-09-30 10 MSCI World Earnings Yield -- Solid Blue Line 10 9 2018-09-30 = 5.17% 9 8 G7 Countries 10-Year Yield Composite** -- Dashed Red Line 8 7 2018-09-30 = 2.05% 7 6 6 5 5 4 4 3 3 2 2 1 1 0 ** GDP-Weighted ($US terms) Composite of Canada, France, 0 -1 Sources: MSCI, Haver Analytics Germany, Italy, Japan, U.K. and U.S. 10-Year Government Yields -1

3 3 2 2 1 1 0 0 -1 -1 -2 -2 G7 Countries 12-Month Real GDP Growth Composite** -3 2018-09-30 = 1.38% -3 -4 -4 -5 ** GDP-Weighted ($US terms) Composite of Y/Y % Changes of Canada, -5 -6 France, Germany, Italy, Japan, U.K. and U.S. Real GDP -6

MSCI World vs. Growth-Adjusted Relative Valuation 10.0 MSCI World Earnings Yield Minus 10-Year Yield Composite 10.0 Growth-Adjusted % Gain/ % of Relative Valuation Annum Time Plus 12-Month Real GDP Growth Composite 7.5 * Above 2 7.88 70.74 2018-09-30 = 4.50% 7.5 Below 2 -3.21 29.26 5.0 5.0

2.5 2.5

0.0 0.0

-2.5 -2.5

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ICS_26C © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 15 Watch widening U.S. budget deficit and its impact on dollar and gold.

Trade-Weighted U.S. Dollar Monthly Data 1968-03-31 to 2018-08-31 Gold vs. U.S. Federal Government Budget Monthly Data 1979-12-31 to 2018-08-31 160 Source: S&P Dow Jones Indices 160 Source: Commodity Systems, Inc. (CSI) www.csidata.com Gold Gain/Annum When: 155 U.S. Dollar Gain/Annum When: 155 1,800 1,800 1,700 Six-Month Change of % Gain/ % of 1,700 150 Six-Month Change of % Gain/ % of 150 Annualized Budget: Annum Time 145 Annualized Budget: Annum Time 145 1,600 1,600 140 140 1,500 Improving 0.08 53.69 1,500 Improving 1.33 53.42 135 135 1,400 * Worsening 4.54 46.31 1,400 * Worsening -2.52 46.58 130 130 1,300 1,300 125 125 1,200 1,200 120 120 1,100 1,100 115 115 1,000 1,000 110 110 900 900 105 105 800 800 100 100 95 95 700 700 90 90 600 600 85 85 500 500 80 80 400 400 75 75 300 300 70 70 200 200 | Nixon(R) |Ford(R)| Carter(D) | Reagan(R) | Bush(R) | Clinton(D) | Bush(R) |Obama(D) Trump(R) |--> | Reagan(R) | Bush(R) | Clinton(D) | Bush(R) | Obama(D) Trump(R) --->| 12-Month Total Budget Surplus 2018-08-31 = -890.2 400 12-Month Total Budget Surplus 2018-08-31 = -890.2 400 250 ($ Billions) 250 300 ($ Billions) 300 200 200 100 100 0 0 0 0 -100 -100 -250 -250 -200 -200 -300 -300 -500 Budget Deficit -500 -400 -400 -500 -500 -750 -750 -600 Budget Deficit -600 -700 -700 -800 -800 -1,000 -1,000 -900 -900 -1,000 -1,000 -1,250 -1,250 -1,100 -1,100 -1,200 -1,200 -1,300 -1,300 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 -1,400 -1,400

U.S. Federal Government Budget 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 I264A I264B © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 16 BOTTOM LINE

„„ Cyclical bull market in question.

„„ Watch breadth and relative strength.

„„ Earnings season could be challenging.

„„ Stay marketweight equities … for now.

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 17 NDR Global Balanced Account Model Monthly Data 1990-01-31 to 2018-09-30 Model Equity Line (2018-09-30 = 1,062.98) Model Benchmark (55% Stocks, 35% Bonds, 10% Cash)(2018-09-30 = 590.46)

631 631 398 398 251 251 158 158 100 100 63 Source: Ned Davis Research, Inc. 63 Model Equity % (2018-09-30 = 65.6%)

80 80 60 60 40 40 20 20 0 0 Benchmark: MSCI All Country World TR Index Source: Ned Davis Research, Inc. Model Bond % (2018-09-30 = 23.2%)

80 80 60 60 40 40 20 20 0 0 Benchmark: Barclays Global Aggregate TR Bond Index Source: Ned Davis Research, Inc. Model Cash % (2018-09-30 = 11.2%) 20 20 15 15 10 10 5 5 0 0 Benchmark: Equal-Weighted 3-Month Global Treasury Composite TR Source: Ned Davis Research, Inc. 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Model vs. Benchmark Returns Full History: 1990-01-31 - 2018-09-30 Model real-time date: 2012-10-31 Equity Line Gain/Annum More Statistics Model 8.6% Benchmark 6.4%

I4100

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 18 NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 19 NDR Recommended Global Regional Equity Allocations Daily Data 2015-04-07 to 2018-10-11 Recommended Allocation (2018-10-11 = 126.45) Benchmark Allocation (2018-10-11 = 125.60) 100.0 100.0 Source: Ned Davis Research, Inc. U.S. Recommended Allocation % (2018-10-11 = 64.0%) Benchmark: MSCI U.S. Total Return (2018-10-11 = 53.2%)

Source: Ned Davis Research, Inc. Europe ex. U.K. Recommended Allocation %(2018-10-11 = 9.0%) Benchmark: MSCI Europe ex. U.K. Total Return(2018-10-11 = 14.8%)

Source: Ned Davis Research, Inc. Emerging Markets Recommended Allocation % (2018-10-11 = 9.0%) Benchmark: MSCI Emerging Markets Total Return (2018-10-11 = 11.7%)

0.0 Source: Ned Davis Research, Inc. 0.0 Japan Recommended Allocation % (2018-10-11 = 7.0%) Benchmark: MSCI Japan Total Return (2018-10-11 = 7.8%)

0.0 Source: Ned Davis Research, Inc. 0.0 U.K. Recommended Allocation %(2018-10-11 = 4.0%) Benchmark: MSCI U.K. Total Return (2018-10-11 = 5.7%)

0.0 Source: Ned Davis Research, Inc. 0.0 Pacific ex. Japan Recommended Allocation %(2018-10-11 = 3.0%) Benchmark: MSCI Pacific ex. Japan Total Return(2018-10-11 = 3.8%)

0 Source: Ned Davis Research, Inc. 0 Canada Recommended Allocation % (2018-10-11 = 4.0%) Benchmark: MSCI Canada Total Return (2018-10-11 = 3.0%)

0.0 Source: Ned Davis Research, Inc. 0.0 Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2016 2017 2018

Official Recommendations vs. Benchmark Returns More Statistics Chart View: 2015-04-07 - 2018-10-11 Equity Line Gain/Annum Benchmarks based on MSCI monthly cap NDR Recommendations 6.9% weightings smoothed by 12 months. Benchmark 6.7%

I7000_RT_NDR

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 20 MSCI Indices Relative to MSCI ACWI Daily Data 2017-10-11 to 2018-10-11 (Log Scale) MSCI Indices Relative to MSCI ACWI II Daily Data 2017-10-11 to 2018-10-11 (Log Scale) 108 United States RS 50-Day Moving Average 200-Day Moving Average 108 102 Europe ex. U.K. RS 50-Day Moving Average 200-Day Moving Average 102 107 OVERWEIGHT 107 101 101 106 106 100 UNDERWEIGHT 100 99 99 105 105 98 98 104 104 97 97 102 102 95 95 101 101 94 94 100 100 93 93 92 92 United Kingdom RS 50-Day Moving Average 200-Day Moving Average 105 105 91 91 102 UNDERWEIGHT 102 90 90 100 100 Pacific ex. Japan RS 50-Day Moving Average 200-Day Moving Average 98 98 104 MARKETWEIGHT 104 95 95 102 102 93 93 101 101 91 91 100 100 107 Japan RS 50-Day Moving Average 200-Day Moving Average 107 99 99 105 MARKETWEIGHT 105 98 98 102 102 97 97 100 100 95 95 98 98 105 Emerging Markets RS 50-Day Moving Average 200-Day Moving Average 105 95 95 102 UNDERWEIGHT 102 100 100 105 Canada RS 50-Day Moving Average 200-Day Moving Average 105 98 98 102 MARKETWEIGHT 102 95 95 100 100 93 93 98 98 91 91 95 95 89 89 93 Source: MSCI 93 87 Source: MSCI 87 16 25 03 14 23 04 13 22 02 11 22 31 09 20 01 12 21 30 10 19 30 09 18 29 07 18 27 06 17 26 06 15 24 04 13 24 03 12 16 25 03 14 23 04 13 22 02 11 22 31 09 20 01 12 21 30 10 19 30 09 18 29 07 18 27 06 17 26 06 15 24 04 13 24 03 12 Oct '17 Nov '17 Dec '17 Jan '18 Feb '18 Mar '18 Apr '18 May '18 Jun '18 Jul '18 Aug '18 Sep '18 Oct '18 Oct '17 Nov '17 Dec '17 Jan '18 Feb '18 Mar '18 Apr '18 May '18 Jun '18 Jul '18 Aug '18 Sep '18 Oct '18 I177 I178 © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 21 NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 22 Total U.S. and International Equity Fund Flows Weekly Data 2013-10-04 to 2018-10-05 Total U.S. and International Bond Fund Flows Weekly Data 2013-10-04 to 2018-10-05 20 20 Total Equity Mutual Fund Flows (2018-10-05 = $-10.84 Billion) Total Flow since 2013-10-04 = $-549.05B Total Bond Mutual Fund Flows (2018-10-05 = $4.32 Billion) Total Flow since 2013-10-04 = $458.84B 15 13-Week Moving Average (2018-10-05 = $-5.70 Billion) 15 20 13-Week Moving Average (2018-10-05 = $3.45 Billion) 20 15 15 10 10 10 10 5 5 5 5 0 0 0 0 -5 -5 -5 -5 -10 -10 -10 -10 -15 -15 -15 -15 -20 -20 50 50 Total Equity ETF Flows (2018-10-05 = $2.38 Billion) Total Flow since 2013-10-04 = $1095.53B 15.0 Total Bond ETF Flows (2018-10-05 = $-0.80 Billion) Total Flow since 2013-10-04 = $378.22B 15.0 40 13-Week Moving Average (2018-10-05 = $5.33 Billion) 40 12.5 13-Week Moving Average (2018-10-05 = $1.53 Billion) 12.5 30 30 10.0 10.0 20 20 7.5 7.5 10 10 5.0 5.0 2.5 2.5 0 0 0.0 0.0 -10 -10 -2.5 -2.5 -20 -20 -5.0 -5.0 50 50 Total Equity Flows (2018-10-05 = $-8.45 Billion) Total Flow since 2013-10-04 = $546.48B Total Bond Flows (2018-10-05 = $3.52 Billion) Total Flow since 2013-10-04 = $837.06B 40 40 20 20 13-Week Moving Average (2018-10-05 = $-0.37 Billion) 13-Week Moving Average (2018-10-05 = $4.99 Billion) 30 30 15 15 20 20 10 10 10 10 0 0 5 5 -10 -10 0 0 -20 -20 -5 -5 -30 -30 -40 -40 -10 -10 Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Sources: Investment Company Institute (www.ici.org) Date Range (years): Sources: Investment Company Institute (www.ici.org) Date Range (years): 1 2 3 5 Max 1 2 3 5 Max I136D I136E © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP See NDR DisclaimerPlease at www.ndr.com/copyright.html see important disclosures For data vendor at disclaimers the end refer of to thiswww.ndr.com/vendorinfo/ report. 23 Bitcoin/Gold Mean Reversion Daily Data 2011-07-29 to 2018-10-11 (Log Scale) 100-Day Volatility Indices -- Bitcoin, Gold, MSCI ACWI, and U.S. Dollar Daily Data 2014-12-31 to 2018-10-11 Bitcoin (USD) (Scale left) 1,995 5.50 Volatility Index = average absolute daily percent change in last 100 days 5.50 31,623 Bitcoin (USD)(2018-10-11 = 2.6%) Gold (Spot) (Scale right) 17,783 1,884 5.25 Gold (Spot) (2018-10-11 = 0.4%) 5.25 MSCI ACWI (2018-10-11 = 0.4%) 10,000 1,778 U.S. Dollar Index (2018-10-11 = 0.3%) 5,623 5.00 5.00 3,162 1,679 4.75 4.75 1,778 1,585 1,000 4.50 4.50 562 1,496 316 4.25 4.25 1,413 178 4.00 4.00 100 1,334 56 3.75 3.75 1,259 32 18 1,189 3.50 3.50 10 1,122 3.25 3.25 5 2 1,059 3.00 3.00 1 Source: Bloomberg Finance L.P., Commodity Systems, Inc. (CSI) www.csidata.com 1,750 +6 SD 1,750 Bitcoin 63-Day Period Rate of Change (-6.87) minus Gold 63-Day Period Rate of Change (-1.18) 2.75 2.75 2.50 2.50 1,500 +5 SD 1,500 2.25 2.25

1,250 +4 SD 1,250 2.00 2.00

1,000 1,000 1.75 1.75 +3 SD 1.50 1.50 750 750 +2 SD 1.25 1.25 500 500 1.00 1.00 +1 SD 250 250 0.75 0.75

Mean 0.50 0.50 0 0 0.25 0.25 Data Range (Years): 1 2 3 5 Max Mean Reversion Periods (market days): 1 5 10 21 42 63 126 252 Source: MSCI, Bloomberg Finance L.P., Commodity Systems, Inc. (CSI) www.csidata.com Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep 2012 2013 2014 2015 2016 2017 2018 2015 2016 2017 2018 I2A I2B © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. © Copyright 2018 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer at www.ndr.com/copyright.html For data vendor disclaimers refer to www.ndr.com/vendorinfo/ NED DAVIS RESEARCH GROUP See NDR DisclaimerPlease at www.ndr.com/copyright.html see important disclosures For data vendor at disclaimers the end refer of to thiswww.ndr.com/vendorinfo/ report. 24 RALLY WATCH REPORT Indicator Chart Current Level Key Level Thrust (Less Than 50 Days)*: 10-Day Advancing Volume / (10-Day Advancing + Declining Volume) I55A 36.5 67.0 % of Stocks at 30-Day New Highs I55B 0.4 44.5 % of Stocks Above 10-Day Moving Averages I55C 2.9 91.0 % of ACWI Markets Above 10-Day Moving Averages I55D 4.3 95.1 McClellan Oscillator I55E -11.8 8.2 Tape (50 Days)**: % of Stocks Above 10-Week Moving Averages S215B 28.2 72.0 % of ACWI Stocks Above 50-Day Moving Averages IGP2000 27.8 65.0 % of ACWI Markets Above 50-Day Moving Averages I5210 8.5 75.0 MSCI ACWI 50-Day Moving Average IGB2000 570.5 603.7 Tape (200 Days and Longer)**: % of Stocks Above 40-Week Moving Averages S215B 53.1 64.0 % of ACWI Stocks Above 200-Day Moving Averages IGP2000 32.9 45.0 % of ACWI Markets Above 200-Day Moving Averages I5205 10.6 85.0 46-Market 252-Day % New Highs Minus % New Lows I161A -31.9 0.0 Sentiment***: VIX Deviation From Trend S0235 115.1 105.0 NDR Daily Crowd Sentiment Composite DAVIS265 32.2 41.5 NDR Crowd Sentiment Poll S574A 61.4 57.0 Report Notes: * Indicator will turn green and bold once Current Reading surpasses Key Level for the first time in 3 months. Indicator will remain highlighted for three months or until the benchmark corrects by 5% or more from the signal date, whichever occurs first. ** Indicator will turn green and bold once Current Reading surpasses Key Level and remain so until Indicator drops below Key Level. *** Sentiment Indicators will turn bold and green when: S0235: Indicator reverses below 105 and remains between 87 and 105, DAVIS265: Indicator falls and remains below 41.5, S574A: Indicator rises above 57 and remains between 57 and 66. Ned Davis Research Group ICS_55.RPT

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 25 BEAR WATCH REPORT Indicator Chart Current Level Bearish Signal

Trend/Breadth

Global Stocks 5-Day ROC% 2-Month Smoothing I80 -0.3 Below -1.0

Equal-Weighted ACWI Price Index (% from 200-Day Smoothing) I81 -7.8 Below -10**

Global Stock/Bond Ratio* (% from 200-Day Smoothing) I82 -0.1 Below -10**

Percentage of ACWI Markets at 252-Day New Lows I83 31.9 Above 20

Percentage of ACWI Markets with Rising 200-Day Moving Averages I84 46.8 Below 50

Percentage of NDR Global Composite Stocks Above 40-Week Moving Averages I85 41.0 Below 50

NDR Global Composite Price and AD Line Smoothings I86 Both Bullish Both Bearish***

Volatility/Sentiment

S&P 500 Volatility Index (VIX) I87 25.0 Above 28.5

World Stock Market Volatility**** I88 0.7 Above 1.0

DSI Global Sentiment Composite I89 12.6 Below 60

Report Notes: Bearish signals closed out once indicator becomes bullish for six consecutive months or after 12-months from start of the signal, whichever occurs first. * Stock/Bond Ratio = MSCI World Price Index/Barclays Long-Term U.S. Treasury Total Return Index. ** Signal requires that indicator cross below smoothing by 10% within six months of remaining bullish (above smoothing for 95% of the time) for six consecutive months. If the current level drops below the key level and no signal is triggered, one or both of these conditions has not been met. *** Both bearish on first date that 50-day price smoothing down by 5% and 20-day AD line smoothing down by 2% simultaneously. **** World Stock Market Volatility = Mean of the 100-Day Moving Averages of the Daily Absolute Changes of the 23 Developed Markets that Comprise the MSCI World Index Ned Davis Research Group ICS_80.RPT

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 26 NDRG Global Recession Probability Model vs. MSCI ACWI Daily Data 1987-12-31 to 2018-10-31 MSCI ACWI (Local Currency) (2018-10-11 = 570.52) Gray Shaded Areas Represent OECD-Defined Global Recession Periods

501 501

398 398

316 316

251 251

200 200

158 158

126 126

100 100 Yellow Shaded Areas Represent Time between ACWI Cyclical Peak (vertical lines) and Model Reading Crossing above 70 Source: MSCI Recession Probability Model (2018-10-31 = 80.04) 100 100

90 90

80 80

70 70

60 60

50 50

40 40

30 30

20 20

10 10

0 0 Model rising/falling is based on three-month change Source: Ned Davis Research, Inc. 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

GCustomizedLOBAL_IN versionT_CH AofR IE90BT_TEST2

NED DAVIS RESEARCH GROUP Please see important disclosures at the end of this report. 27 NED DAVIS RESEARCH GROUP Generate alpha. Identify risk. Choose Ned Davis Research. Macro sales @ndr.com ndamenta www.ndr.com Fu l (800) 241-0621 Founded in 1980, Ned Davis Research Group is a leading independent research  rm with clients around the globe. With a range of products and services utilizing a 360° methodology, we deliver award-winning solutions to the world’s leading Idea VENICE investment management companies. Our clients include professionals from global investment  rms, banks, insurance 600 Bird Bay Drive West companies, mutual funds, hedge funds, pension and endowment funds, and registered investment advisors. Venice, FL 34285 Technical H (941) 412-2300 C S A entiment RO NEW YORK PP ° A 1120 Avenue of the Americas 360 6th fl oor New York, NY 10036 (646) 810-7270 Important Information and Disclaimers BOSTON Ned Davis Research, Inc. 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