Advice & Research Jennifer Timmerman, Market Advice Associate Jack Kraft, Market Advice Associate Angela Shin, Market Advice Associate July 2, 2020 Looking Ahead

Wall Street lit up ahead of the holiday weekend as encouraging economic reports overpowered worries surrounding a flare- up in COVID-19 infections. Risk assets shone bright, with U.S. equities capping their best quarter in decades. Also boosting investor sentiment were positive developments related to a coronavirus vaccine candidate.

S&P 500 Index Performance: June 29—July 2

Source: Bloomberg *As of July 2, 4:00 p.m. ET

Heading into Monday’s session, investors decided to brush off concerns surrounding a resurgence in COVID-19 cases. Stocks had just come off a downbeat week with the S&P 500 drifting 2.9% lower as a jump in coronavirus infections in several pockets of the U.S. weighed on risk sentiment. The trend carried through the weekend, with some states scaling back reopening measures in an attempt to mitigate the further spread. By Monday, total worldwide infections exceeded 10 million, while eight American states observed a record spike in cases on Tuesday. However, positive developments on the vaccine front mid-week helped lift the overall mood. Shares of drugmaker Pfizer climbed following an optimistic update on its coronavirus vaccine being developed with German company BioNTech.

Investment and Insurance Products: NOT FDIC Insured NO Bank Guarantee MAY Lose Value

Looking Ahead July 2, 2020

Expectations of continued fiscal and monetary stimulus support also seemed to buoy stocks, with U.S. equity benchmarks ending June on a high note. The S&P 500 capped its strongest three-month performance since 1998 with a 20% gain, offsetting its pandemic-related first-quarter loss. The Dow closed out its best quarter since 1987, while the Composite’s April-June rally proved to be the Tech-heavy index’s most robust three months since 1999. Also notably, Wednesday (July 1) marked 100 calendar days since the S&P 500 bottomed from its 33% bear market (which happened to occur over a period of just 33 days). Bespoke Investment Group highlighted the fact that the benchmark index’s rally during this time span (roughly +40%), was the largest such gain since 1933.

2020 Asset Class Performance Breakdown

Source: Bloomberg *As of July 2, 4:00 p.m. ET

Closely-watched commodities were not left out of the headlines this week, as WTI crude experienced its strongest quarter in three decades, a stark contrast from its worst such period in history during the January-March time-frame. Meanwhile, COMEX gold capped its best three-month stretch since 2016, settling above $1,800.00/ounce for the first time since 2011.

Propelling further gains in the equity market this week were a handful of positive economic updates. The all-important monthly jobs report from the Department of Labor showed non-farm payrolls increased by a record 4.8 million in June, up from the surprise addition of nearly 2.7 million in May. Furthermore, the unemployment rate dipped to 11.1%, better than expectations and improving slightly from 13.3% the prior month. Separately, the ADP employment report revealed the U.S. added 2.3 million private jobs in June, while May’s figure was drastically revised upward to reflect a more than 3 million addition, instead of an originally reported decline. Also bolstering confidence in a potential “V-shaped” economic recovery was the Institute for Supply Management’s (ISM) manufacturing gauge, which surprised to the upside. The update showed sector activity in the U.S. returned to expansionary territory in June. The Purchasing Managers’ Index (PMI) reading reached a 14-month high of 52.6, up from 43.1 in May, and represented the largest uptick in 40 years as business activity Page 2 of 7

Looking Ahead July 2, 2020 resumed amid easing lockdown restrictions. Meanwhile, the Conference Board’s gauge of consumer confidence advanced the most since 2011 in June, while in the real estate realm, pending homes sales jumped a record 44.3% in May.

Gauge of U.S. Manufacturing Activity vs. Labor Department’s Monthly Jobs Report

Source: Bloomberg *As of July 2, 9:30 a.m. ET **”ISM” represents the Institute for Supply Management

As investors digested a week of mostly positive headlines, the major averages logged a solid performance ahead of the Fourth of July holiday weekend. Through Thursday’s close, the S&P 500 notched a 4% gain, with its year-to-date loss trimmed to 3.1%. The Dow finished the week 3.3% higher, while the Nasdaq Composite climbed 4.6%.

All 11 S&P 500 sectors ended in positive territory this week, with four groups rising more than 5%. FedEx was the best- performer in the index, up nearly 20% after delivering stronger-than-expected quarterly numbers amid “Christmas-like” levels of consumer spending. Elsewhere in earnings, chipmakers and each provided optimistic forward guidance. In other corporate news, Tesla was a standout, surging more than 26% for the week after the electric vehicle manufacturer delivered more than 90,000 cars in the second quarter, well above the 72,000 analysts had expected. Industrial giant Boeing also ended the week on a positive note after the beleaguered 737-MAX jet completed key test flights needed for recertification. Elsewhere, shares of Facebook climbed despite more companies pausing advertising on the social media platform, while Uber advanced on news the ride-hailing company was engaging in talks to acquire food delivery service Postmates.

Page 3 of 7

Looking Ahead July 2, 2020

S&P 500 Sector Performance with FAANG*

Source: Bloomberg *As of July 2, 4:00 p.m. ET *FAANG represented by an equal weight portfolio of Facebook, , Apple, and Alphabet.

Treasuries were little changed, with the yield on the benchmark 10-year note ending Thursday at 0.67%, up just two basis points from the previous Friday’s (June 26) close. Helping put a lid on yields was the release of the Federal Reserve’s June 10 meeting minutes, which indicated several participants viewed the U.S. economy needing additional support ”for some time.” The cautionary tone was further reflected in Fed Chair Jerome Powell’s testimony during a congressional hearing this week, in which he reiterated the extreme uncertainty of the central bank’s economic outlook and the importance of successfully containing the spread of the coronavirus.

Looking Ahead to Next Week: July 6-10

Next week will feature a lighter slate of economic updates, central bank speakers, and earnings reports. Headlining the data calendar will be dual updates on the U.S. services sector Monday. The Institute for Supply Management’s (ISM) non- manufacturing index is anticipated to have increased, while investors will also receive a final June update on the services sector from research firm IHS Markit. Elsewhere, initial jobless claims will be in focus as several U.S. states take measure to roll back economic reopenings amid an uptick in COVID-19 cases. Rounding out the docket will be an update on producer prices, which are expected to have risen 0.4% in June, matching the prior pace. Meanwhile, corporate profit reports will remain faint before the unofficial start to second-quarter earnings season kicks off in mid-July. Notable corporate confessions will come from , Paychex, and Bed Bath & Beyond. In central bank news, the lone discussion on the economy will be hosted by Federal Reserve bank regional presidents from San Francisco and Richmond.

Page 4 of 7

Looking Ahead July 2, 2020

Disclaimers

Ticker Price Ticker Price WBA 41.98 MU 50.02 PAYX 76.59 XLNX 95.20 BBBY 10.81 UBER 30.58 PFE 34.49 BA 180.81 BNTX 63.17 FB 233.09 FDX 155.48 TSLA 1207.54

Source: Bloomberg as of July 2, 2020 4:00 p.m. ET

All investing involves risks including the possible loss of principal. Equity securities are subject to market risk which means their value may fluctuate in response to general economic and market conditions and the perception of individual issuers. Investments in equity securities are generally more volatile than other types of securities. Dividends are not guaranteed and are subject to change or elimination.

Additional information available upon request. Past performance is not a guide to future performance. The material contained herein has been prepared from sources and data we believe to be reliable but we make no guarantee as to its accuracy or completeness. This material is published solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or investment product. Opinions and estimates are as of a certain date and subject to change without notice.

Definitions An index is unmanaged and not available for direct investment.

The S&P 500 Index is a market capitalization-weighted index composed of 500 widely held common stocks that is generally considered representative of the US stock market.

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.

The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market.

The Bloomberg Barclays U.S. Treasury Index measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the US Treasury. Treasury bills are excluded by the maturity constraint.

The U.S. Dollar Index (DXY) indicates the general international value of the U.S. dollar. The index does this by averaging the exchange rates between the U.S. dollar and major world currencies. The ICE US computes this by using the rates supplied by some 500 banks.

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.

The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index and is a subset of the STOXX Global 1800 Index. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 17 countries of the European region.

The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange.

Page 5 of 7

Looking Ahead July 2, 2020

Scheduled Economic Releases for Week of July 6, 2020

Monday, July 6 Time Country Release For Consensus Prior 2:00 AM Germany Factory Orders MoM May -- -25.80% 9:45 AM U.S. Markit US Services PMI Jun F -- 46.7 9:45 AM U.S. Markit US Composite PMI Jun F -- 46.8 10:00 AM U.S. ISM Non-Manufacturing Index Jun 49.1 45.4 Tuesday, July 7 Time Country Release For Consensus Prior 2:00 AM Germany Industrial Production SA MoM May -- -17.90% 10:00 AM U.S. JOLTS Job Openings May -- 5046 Wednesday, July 8 Time Country Release For Consensus Prior 7:00 AM U.S. MBA Mortgage Applications 3-Jul -- -- 10:30 AM U.S. DOE U.S. Crude Oil Inventories 3-Jul -- -- 3:00 PM U.S. Consumer Credit May -$17.500b -$68.779b 7:50 PM Japan Core Machine Orders MoM May -- -12.00% Thursday, July 9 Time Country Release For Consensus Prior 8:30 AM U.S. Initial Jobless Claims 4-Jul -- -- 8:30 AM U.S. Continuing Claims 27-Jun -- -- 10:00 AM U.S. Wholesale Inventories MoM May F -1.20% -1.20% Friday, July 10 Time Country Release For Consensus Prior 8:30 AM U.S. PPI Final Demand MoM Jun 0.40% 0.40% 8:30 AM U.S. PPI Ex Food and Energy MoM Jun 0.10% -0.10% 8:30 AM U.S. PPI Final Demand YoY Jun -- -0.80% 8:30 AM U.S. PPI Ex Food and Energy YoY Jun -- 0.30% 1:00 PM U.S. Baker Hughes U.S. Rig Count 10-Jul -- --

Source: Bloomberg Data as of June 30, 2020

Page 6 of 7

Looking Ahead July 2, 2020

Scheduled Earnings Releases for Week of July 6, 2020

Monday, July 6 Before the Open Company Symbol Price EPS Est. Year Ago Revenue Est. ($MM) **No Scheduled Earnings Releases of Note ** Tuesday, July 7 Before the Open Company Symbol Price EPS Est. Year Ago Revenue Est. ($MM) Paychex Inc PAYX $76.59 $0.60 $0.63 $910.93 After Market Close Company Symbol Price EPS Est. Year Ago Revenue Est. ($MM) SMART Global Holdings Inc SGH $27.03 $0.67 $0.34 $282.60 Wednesday, July 8 Before the Open Company Symbol Price EPS Est. Year Ago Revenue Est. ($MM) MSC Industrial Direct Co Inc MSM $73.10 $1.10 $1.44 $814.55 After Market Close Company Symbol Price EPS Est. Year Ago Revenue Est. ($MM) Bed Bath & Beyond Inc BBBY $10.81 -$1.21 $0.12 $1,354.93 Thursday, July 9 Before the Open Walgreens Boots Alliance Inc WBA $41.98 $1.21 $1.47 $34,267.23 Helen of Troy Ltd HELE $185.85 $1.39 $1.64 $347.00 AZZ Inc AZZ $33.13 $0.61 $0.81 $279.00 After Market Close PriceSmart Inc PSMT $59.43 $0.31 $0.47 -- WD-40 Co WDFC $197.01 $1.08 $1.31 $108.00 Friday, July 10

**No Scheduled Earnings Releases of Note **

Source: Bloomberg Prices as of close on July 2, 2020

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

©2020 Wells Fargo Clearing Services, LLC. All rights reserved. CAR-0720-00348

Page 7 of 7