Investment Advisory Group, Market Navigator...Investment Advisory Group, SunTrust Advisory Services, Inc. TABLE OF CONTENTS Monthly Letter Asset Class Returns House Views 1. HOUSE

Market Navigator

Securities and Insurance Products and Services:• Are Not FDIC or any other Government Agency Insured• Are Not Bank Guaranteed• May Lose Value

J u n e2 0 2 0

from the Investment Advisory Group,SunTrust Advisory Services, Inc.

TABLE OF CONTENTS

Monthly Letter

Asset Class Returns

House Views

1 . HOUSE VIEWS 3. EQUITIES

4. F IXED INCOME

US & Global Snapshots

2 . ECONOMY

Bear vs. Bull Case

Recurring & Topical Charts



House Views

MONTHLY LETTER

…A disconnect at inflection points between the market and the economy is typical, even while the current period is magnified. Markets are forward looking…

“

“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria” is a quote attributed to legendary investor, Sir John Templeton. This quote is as apt now as ever. After falling at a record pace, stocks formed a bottom in March as uncertainty and pessimism spiked. The subsequent record rally has been met with great skepticism given it has taken place during a once-in-a-generation pandemic, the sharpest economic decline in history, rising geopolitical tensions and civil unrest.

A disconnect at inflection points between the market and the economy is typical, even while the current period is magnified. Markets are forward looking and have risen, on average, five months before the end of a recession and often as the news flow has remained bleak. Our view is that this will likely be looked back upon as the sharpest but also the shortest recession in history, likely ending during the summer months. The end of a recession simply means that the worst is behind us and the economy has troughed. Trends are already broadly stabilizing, albeit from very depressed levels. However, the repair process and recapturing the prior level of economic activity will take time while the devastating effects of the downturn will linger.

Nevertheless, the end of the recession combined with the extreme pessimism in March and the extreme oversold conditions that were met with an aggressive policy response is what tends to happen at the onset of a bull market (even though everything appears to be happening at warp speed today). Moreover, the first part of a bull market tends to be the sharpest and is a sign of underlying strength. Notably, the path from the March low is on par with the strongest previous bull markets and the initial trajectory following the 1982 and 2009 lows.

Thus, our base case is we are indeed in a bull market. A bull market that started in March and likely has further to go. However, even in bull markets, there are ebbs and flows along with risks. While stocks remain attractive relative to most other asset classes, valuations are elevated on an absolute basis. There is also still a possibility that we see a coronavirus reinfection wave in the fall, and the election season is set to inject volatility into the markets later this year while China-US tensions are escalating.

Pulling this all together, we advise investors to remain overweight equities relative to fixed income and cash. While remaining overweight, as stocks get extended from target allocations, periodic and disciplined rebalancing of assets should be considered to mitigate risks. For investors with excess cash, we advocate an averaging-in approach. We still favor US equities longer term, but incrementally the outlook for the international developed markets is improving as the European and Japanese stimulus response is expanding. Likewise, we maintain a large cap bias and a modest growth tilt. That said, following the extreme underperformance seen in small caps, value, and international markets, their recent rebound likely has further to go near term. High quality bonds should provide portfolio ballast during the inevitable market pullbacks. Although the opportunity has lessened, we still see incremental value in investment grade and high yield bonds.

Warmly,

Keith Lerner, CFA, CMTChief Market Strategist

Asset Class Total Returns Through May 2020

Data Source: SunTrust IAG, FactSet. Data as of 5/29/20Total return includes price and dividend/interest income.Past performance does not guarantee future results.Return values based on indices by MSCI, S&P, FTSE Russell, Bloomberg, HFR, JP Morgan. Please see disclosure page for index definitions.An investment cannot be directly made into an index.

4.3

4.8

4.4

0.8

7.3

4.3

1.7

0.5

0.1

-0.2

1.6

2.8

4.6

0.1

4.3

1.4

Global (MSCI ACWI)

US Large Cap (S&P 500)

International Developed (MSCI EAFE USD)

Emerging Markets (MSCI EM USD)

US Mid Cap (S&P MidCap)

US Small Cap (S&P Small Cap)

Global Real Estate (FTSE NAREIT All Equity REITs)

US Core Bonds (Bloomberg Barclays Aggregate)

US Mortgage-Backed (Bloomberg Barclays U.S. MBS Index)

Governments (Bloomberg Barclays US Government)

Corporates (Bloomberg Barclays US Agg IG Corporate)

Intermediate Municipal (Bloomberg Barclays Municipal 1-15 Year)

High Yield (BofAML High Yield Master)

International Developed (ICE BofAML Global Governmentx US)

Bloomberg Commodity Index

HFRX Global Hedge Fund Index

MTD (%)-9.2

-5.0

-14.3

-16.0

-13.9

-20.8

-15.3

5.5

3.6

8.5

3.0

1.6

-5.7

0.5

-21.2

-2.8

Global (MSCI ACWI)






Global Real Estate (FTSE NAREIT All Equity REITs)

US Core Bonds (Bloomberg Barclays Aggregate)

US Mortgage-Backed (Bloomberg Barclays U.S. MBS Index)


Corporates (Bloomberg Barclays US Agg IG Corporate)

Intermediate Municipal (Bloomberg Barclays Municipal 1-15Year)

High Yield (BofAML High Yield Master)

International Developed (ICE BofAML Global Government x US)



YTD (%)5.4

12.8

-2.8

-4.4

-0.8

-8.1

-7.3

9.4

6.5

11.2

10.0

4.0

0.3

2.8

#N/A

-17.1

3.0

Global (MSCI ACWI)






US Real Estate (FTSE NAREIT All Equity REITs)

US Core Bonds (Bloomberg Barclays US Aggregate)

US Mortgage-Backed (Bloomberg Barclays US MBS Index)


Corporates (Bloomberg Barclays US IG Corporate)

Intermediate Municipal (Bloomberg Barclays Municipal 1-15 Year)

High Yield (ICE BofA High Yield Master)

International Developed (ICE BofA Global Government x US)



1 Year (%)

Fixed Income

Equity

Non-Traditional

For domestic use onlyPast performance does not guarantee future results. Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.In this document, we express our high-level investment strategy views without portfolio context constraints. We aim to represent relative opportunities within each broader asset class. This allows us to signal what we are watching and where things are changing at the margin within positions that may differ from our asset allocation guidance and Strategy Portfolios. Long-term expected risk, return and correlation statistics are derived from the Portfolio & Market Strategy team’s capital market assumptions process and are not guaranteed. Secular trends, such as demographics, global debt, inflation, etc. are initially assessed to determine the impact on global markets over the next decade. With an understanding of the current stage of the business cycle, a combination of quantitative and fundamental techniques is used to further analyze factors that include, but are not limited to: (1) the outlook for asset class return drivers; (2) the probability of sustained returns; (3) absolute and relative valuation measures; (4) the impact of economic drivers on asset class assumptions and (5) changes in investor sentiment and liquidity. Capital market assumptions are reviewed and/or modified at least once a year.

Asset Class View, Forecasts & Valuation*

Since our last publication, we upgraded our international developed markets outlook by one notch, given an underperformance extreme and a ramp up in monetary and fiscal stimulus in Europe and Japan.

Investment and Insurance Products: •Are not FDIC or any other Government Agency Insured •Are not Bank Guaranteed •May Lose Value

June 5, 2020

Asset Classes EquityEquity Global Equity 6.75% 16.8%Fixed Income US Large Cap Equity 6.75% 15.2%Commodities US Small Cap Equity 7.50% 20.1%Cash Int'l Developed Markets Equity 6.50% 18.5%

Int'l Developed Markets Small Cap 7.00% 19.2%Global Equity Emerging Markets Equity 7.25% 24.4%US Large Cap US Mid Cap Fixed IncomeUS Small Cap Intermediate-Term Municipals 2.25% 3.5%International Developed Markets US Core Taxable Bonds 2.50% 3.3%Int'l Developed Markets Small Caps US Government Bonds 2.00% 3.9%Emerging Markets (EM) US IG Corporate Bonds 3.50% 6.0%Growth & Value Style US HY Corporate Bonds 5.00% 10.0%

US Fixed Income Key IAG 2020 ForecastsUS Government 2020 Global GDP Forecast**US Mortgage-Backed Securities US GDP RangeUS Investment Grade Corporate (IG) Year-End Fed Funds Rate RangeUS High Yield Corporates (HY) 10-Yr US Treasury YieldFloating-Rate Bank Loans S&P 500 12-Month Forward EPS***Duration **Bloomberg Consensus ***FactSet Estimates

Expected

Return

Expected

Risk

$145.22

Less

Attractive

More

Attractive

-1.5%-5.4% - 0.0%

0.00% - 0.25%0.25% - 1.50%

Less

Attractive

More

Attractive

Tactical Outlook (3-12 Months) Long-Term Capital Market Assumptions (10 Yr)

Less

Attractive

More

Attractive

Expected

Return

Expected

Risk

Global Equity Market ValuationCurrent Price-to-Earnings (P/E) Ratio10-Year Average P/E Ratio10-Year High P/E Ratio10-Year Low P/E Ratio

S&P 500 MSCI ACWI MSCI EAFE MSCI EM20.3x 16.6x 14.3x 12.2x

11.0x20.5x 17.3x 16.3x 13.5x15.0x 14.0x 13.2x

10.0x 9.6x 9.1x 8.2x

USE THIS ASSET ALLOCATION

Tactical Positioning (3-12 Months)Long-Term Capital Markets Assumptions (10 Yr)

Less AttractiveMore AttractiveExpected ReturnExpected Risk

Asset ClassesEquityGlobal Equity Market ValuationS&P 500MSCI ACWIMSCI EAFEMSCI EM

EquitylGlobal Equity6.75%16.8%Current Price-to-Earnings (P/E) Ratio20.3x16.5x14.7x12.7x

Fixed IncomelUS Large Cap Equity6.75%15.2%10-Year Average P/E Ratio15.0x14.0x13.2x11.0x

CommoditieslUS Small Cap Equity7.50%20.1%10-Year High P/E Ratio20.5x17.3x16.3x13.5x

CashlInt'l Developed Markets Equity6.50%18.5%10-Year Low P/E Ratio10.0x9.6x9.1x8.2x

Less AttractiveMore AttractiveEmerging Markets Equity7.25%24.4%

Global Equity Expected ReturnExpected Risk

US Large Cap lFixed Income

US Mid Cap lIntermediate-Term Municipals2.25%3.5%

US Small Cap lUS Core Taxable Bonds2.50%3.3%

International Developed MarketslUS Government Bonds2.00%3.9%

Emerging Markets (EM)lUS IG Corporate Bonds3.50%6.0%

Growth & Value StylelUS HY Corporate Bonds5.00%10.0%

Less AttractiveMore Attractive

US Fixed IncomeKey 2019 Forecasts

US Governmentl2019 Global GDP Consensus Forecast**3.1%

US Mortgage-Backed SecuritieslIAG Forecast US GDP Range2.30% - 2.40%

US Investment Grade Corporate (IG)lIAG Forecast Fed Funds Rate Range1.50% - 1.75%

US High Yield Corporates (HY)lIAG Forecast 10-Yr US Treasury Yield1.50% - 2.00%

Floating-Rate Bank LoanslS&P 500 P/E Ratio Range15x - 18x

Duration lS&P 500 12-Month Forward EPS***$177.0

**Bloomberg Consensus ***FactSet Estimates

Int'l Dev Small Caps

Tactical Outlook (3-12 Months)Long-Term Capital Market Assumptions (10 Yr)







Less AttractiveMore AttractiveInt'l Developed Markets Small Cap7.00%19.2%

Global Equity Emerging Markets Equity7.25%24.4%

US Large Cap lExpected ReturnExpected Risk

US Mid Cap lFixed Income

US Small Cap lIntermediate-Term Municipals2.25%3.5%

International Developed MarketslUS Core Taxable Bonds2.50%3.3%

Int'l Developed Markets Small CapslUS Government Bonds2.00%3.9%




US Fixed IncomeKey IAG 2020 Forecasts

US Governmentl2020 Global GDP Forecast**-1.5%`

US Mortgage-Backed SecuritieslUS GDP Range-5.4% - 0.0%

US Investment Grade Corporate (IG)lYear-End Fed Funds Rate Range0.00% - 0.25%

US High Yield Corporates (HY)l10-Yr US Treasury Yield0.25% - 1.50%

Floating-Rate Bank LoanslS&P 500 12-Month Forward EPS***$145.22

Duration l**Bloomberg Consensus ***FactSet Estimates

USE THIS ASSET ALLOCATION

Tactical Positioning (3-12 Months)Long-Term Capital Markets Assumptions (10 Yr)







Less AttractiveMore AttractiveEmerging Markets Equity7.25%24.4%

Global Equity Expected ReturnExpected Risk

US Large Cap lFixed Income

US Mid Cap lIntermediate-Term Municipals2.25%3.5%

US Small Cap lUS Core Taxable Bonds2.50%3.3%

International Developed MarketslUS Government Bonds2.00%3.9%




US Fixed IncomeKey 2019 Forecasts

US Governmentl2019 Global GDP Consensus Forecast**3.1%

US Mortgage-Backed SecuritieslIAG Forecast US GDP Range2.30% - 2.40%

US Investment Grade Corporate (IG)lIAG Forecast Fed Funds Rate Range1.50% - 1.75%

US High Yield Corporates (HY)lIAG Forecast 10-Yr US Treasury Yield1.50% - 2.00%

Floating-Rate Bank LoanslS&P 500 P/E Ratio Range15x - 18x

Duration lS&P 500 12-Month Forward EPS***$177.0

**Bloomberg Consensus ***FactSet Estimates

Int'l Dev Small Caps

Tactical Outlook (3-12 Months)Long-Term Capital Market Assumptions (10 Yr)







Less AttractiveMore AttractiveInt'l Developed Markets Small Cap7.00%19.2%

Global Equity Emerging Markets Equity7.25%24.4%

US Large Cap lExpected ReturnExpected Risk

US Mid Cap lFixed Income

US Small Cap lIntermediate-Term Municipals2.25%3.5%

International Developed MarketslUS Core Taxable Bonds2.50%3.3%

Int'l Developed Markets Small CapslUS Government Bonds2.00%3.9%




US Fixed IncomeKey IAG 2020 Forecasts

US Governmentl2020 Global GDP Forecast**-1.5%`

US Mortgage-Backed SecuritieslUS GDP Range-5.4% - 0.0%

US Investment Grade Corporate (IG)lYear-End Fed Funds Rate Range0.00% - 0.25%

US High Yield Corporates (HY)l10-Yr US Treasury Yield0.25% - 1.50%

Floating-Rate Bank LoanslS&P 500 12-Month Forward EPS***$145.22

Duration l**Bloomberg Consensus ***FactSet Estimates

Global Snapshot from the Investment Advisory Group

D E V E L O P E D M A R K E T S

U S The US recession is deeper, and unemployment higher compared to the rest of the world. Conversely, government aid has been robust and fast, and reopening is occurring faster. All states are now reopening at varying paces. Challenges remain, including elections, social unrest and widespread protests.

E U R O Z O N E Angela Merkel and Emmanuel Macron reached an agreement for a fiscal stimulus package that allows risk-sharing between member countries. The European Union budget is expected to increase by €750 billion, with €500 billion proposed as grants to member states instead of loans. The European Central Bank is expected to increase monetary stimulus through asset purchases by at least €500 billion.

G E R M A N Y Europe’s largest economy is preparing a second fiscal stimulus package estimated at around €50-€100 billion.

J A P A N The country avoided compulsory lockdowns without having an explosive increase in cases. Consumers are slowly returning to normal after a seven week state of emergency. In addition to the announced record $1.1 trillion economic stimulus package, lawmakers are working on another stimulus package that offers rent relief and tuition subsidies.

E M E R G I N G M A R K E T S

C H I N A China dropped its targeting of the annual Gross Domestic Product (GDP) growth rate. Eliminating rigid economic growth rate targets could ease some concerns regarding China’s economic numbers’ validity and allow the country to invest in the productive parts of the economy instead of achieving a pre-defined growth rate objective.

B R A Z I L Latin America’s largest economy is struggling to contain the spread of the virus and the contraction in its economy. Q1 2020 GDP shrank 1.5%, and Q2 numbers are expected to be much worse with social isolation orders. The recently announced emergency support package of $222 billion is expected to push the fiscal deficit close to 20% of GDP, erasing the projected gains from last year’s pension reform.

I N D I A The $266 billion (10% of GDP) fiscal stimulus package failed to impress, and the true value of the stimulus plan is estimated at around only 1.5%-1.8% of GDP.

S K O R E A The government is working on a $62 billion, 3-year spending plan to reshape its economy and stimulate economic recovery efforts. The long-term spending plan aims to improve the country's productivity by investing in artificial intelligence, digitizing the economy, and implementing 5G infrastructure.

G L O B A L O U T L O O K

Survey-based data coming from many parts of the global economy is pointing to a recovery, albeit from depressed levels, as quarantines are lifted or significantly reduced. In response to weak economic data, central banks are providing vast amounts of monetary stimulus, with additional measures recently announced in Europe and Japan. Countries with spending flexibility, such as the US, South Korea, Germany, and Japan are planning to increase fiscal stimulus.

30

35

40

45

50

55

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Global PMI Manufacturing Surveys

>50 = Expansionary

Data Source: SunTrust IAG, Haver

Global Manufacturing Tentatively Stabilizing, Albeit at Still Depressed Levels

29.0%

8.3%

20.0%

9.0% 10.0%15.4%

27.6%

40.3%

5.1% 5.0%

44.4%

35.9%

60.3%

14.1% 15.0%

US Eurozone Japan U.K. China

Monetary & Fiscal Stimulus as % of GDPCentral BankLiquidity Injection

Govt FiscalStimulus

CombinedStimulus

Unprecedented fiscal and monetary action is occurring around the world, with Japan and Europe stepping up more recently. Fiscal and monetary support is helping to blunt the economic downside due to COVID-19.

Source: Cornerstone Macro, SunTrust IAG

Global Fiscal & Monetary Response Huge

US Economic Snapshot from the Investment Advisory Group

I N D I C A T O R T R E N D W H A T W E ’ R E W A T C H I N G

US Economy The collapse of US economic data largely reflects the COVID-19 lockdowns. We anticipate a shorter but deeper than average recession. The shape of the coming recovery should resemble Nike’s iconic ‘swoosh’ logo and take until early 2022 to regain the lost ground.

Consumer Spending Spending on services, particularly for health care, has collapsed more than for goods, many of which can be purchased online and delivered. Auto sales bottomed in April and rebounded in May.

Residential Housing Although hampered by COVID-19 in March, sharply lower mortgage rates led to a rise in new home sales in April and a continued surge in mortgage purchase applications through May.

Business Spending Business spending is challenged by uncertainty and supply chain disruptions, but aside from aircraft, overall spending has only dipped modestly through April and is showing signs of pent up demand.

Interest Rates After volatility in March and April, rates have stabilized thanks to continued efforts by the Federal Reserve to aid market functions and ease financial conditions. This has lowered interest rates, helping debt servicing for businesses and consumers.

Manufacturing Government-mandated shutdowns hamstrung production, particularly for autos, as well as supply chains in March and April. All US auto plants restarted in May, but aircraft plants are furloughed.

Inflation The lack of demand and the collapse in oil prices have sharply pulled down consumer and wholesale prices. While increased costs due to COVID-19 may push up some prices, it should be fleeting.

Employment (Jobs) Over 40 million jobless claims in 10 weeks and the unemployment rate is headed to 20%. Of the 21 million jobs lost in March and April, 87.7% temporarily were furloughed due to the lockdowns.

Positive Negative Neutral / Mixed

Given the tremendous amount of uncertainty, there is a wide range of possible economic results for this year. The current median consensus projects a sharp slowdown, concentrated in the second quarter of 2020, with improvement in the third and fourth quarters.

-34.2%

15.0%7.9%

-4.8%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

1Q20 2Q20 3Q20 4Q20

US Gross Domestic Product (GDP) and Consensus Ranges

Median Consensus

Actual Results

Data Source: SunTrust IAG, Bloomberg Consensus as of May 29, 2020

US Economy: Wide Range of Potential Outcomes

$16

$17

$18

$19

$20

3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022

US Gross Domestic Product (in Trillions)Actual SunTrust IAG Forecast Prior Peak

The US economy appears set for a short but deep recession lasting two quarters, while the recovery will resemble Nike’s iconic ‘swoosh’ logo, which will take until early 2022 to regain the lost ground.

Source: SunTrust IAG, IHS Markit. Real gross domestic product, actual for 3Q 2019 through 1Q 2020, SunTrust IAG forecast for 2Q 2020 through 4Q 2022.

Short Recession and ‘Swoosh’-Shaped Recovery

Recession

Recession“Trough”

Expansion

Early 2022 for a “Full” Recovery

The four fiscal packages totaling $2.7 trillion, including the CARES Act, are more than triple the size of the fiscal plan enacted during the Great Financial Crisis on a dollar basis.

More importantly, this time around, the stimulus is almost concurrent with the onset of the recession versus taking roughly a year to pass during the financial crisis of 2008.

$787 Billion

$2.7 Trillion

5.4%

12.4%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Great Financial Crisis (2007-2009) Current

US Fiscal Package Comparison

Fiscal Stimulus Percentage of GDP

Data Source: SunTrust IAG, Bureau of Economic Analysis, Congressional Budget Office. The CARES Act is the Coronavirus Aid, Relief, and Economic Security Act.

US Fiscal Response Extraordinary in Size & Speed

While employment declines have been staggering, government transfer programs have helped to backstop consumers with extensive support programs including the CARES tax rebate checks, unemployment benefits, etc.

Moreover, consumer spending was restricted by lockdowns. The combination of these factors is reflected in a spike in the personal savings rate to 33%, nearly double the highest level in over 60 years.

0%

5%

10%

15%

20%

25%

30%

35%

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Personal Savings Rate

Data Source: SunTrust IAG, Bloomberg. Personal savings rate is shown as a percentage of disposable personal income.

Massive Spike in Personal Savings

Activities are restarting as all 50 states are now at least partially open. Yet, the pace is uneven based on location and thetype of activity, which is likely to endure for a couple more months, particularly for long-distance travel.

Sources: SunTrust IAG and the following additional sources respectively: Top left: Census Bureau, News Reports (NY Times, Politico) as of May 27, 2020. Top right: Apple Mobility through May 19. Bottom left: OpenTable through May 28. Bottom right: Bloomberg, Transportation Security Administration through May 28.

US Economy: Slowly Reopening But Uneven

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US Population Under Stay-At-Home Orders

PartialReopen

Full Stay-At-Home Ban

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US Mobility Trends

Driving Transit Walking

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ayOpenTable Bookings

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TSA Checkpoint Traveler Throughput

Equities

After the sharp market snapback, the near-term risk/reward has become mixed. Equities still appear favorable relative to most other assets on a 12-month and longer-term basis.

Data Source: SunTrust IAG

Stock Market Outlook: Bear Versus Bull Case

BEAR CASE V S . BULL CASEEconomy is in recession Markets tend to bottom well before a recession is over

Market valuations are stretched Relative valuations still favor stocks

Earnings potentially have more downside Profit trends are stabilizing

Market has moved too far, too fast First stage of a bull market tends to be powerful

Market leadership is concentrated in a few names Market participation has recently broadened

Uncertainty is high Unprecedented stimulus helping to reduce outlier risk

Source: Strategas, SunTrust IAG, BloombergPast performance does not guarantee future results

Coronavirus Shock Led to Sharpest Market Move From All Time High to Bear Market

40

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90

100

0 50 100 150 200 250 300 350 400 450 500 550 600

Perf

orm

ance

(In

dexe

d to

100

)

Trading Days From Peak to Trough

Bear Market Declines From Peak

1961 1966 1968 1973 1980 1987 2000 2007 2020

2020 1987

2007

1973 2000

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0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 252

Perfo

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ce (I

ndex

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)

Trading Days Since Trough

Path of Bull Markets Over First Year From Low

1962 1966 1970 1974 1982 1987 2002 2009 2020

Data Source: SunTrust IAG, Bloomberg. 1 Year = 252 trading days. Past performance does not guarantee future results

Market Snapback Among Sharpest in History & On Par With Kickoff to 1982 and 2009 Bull Markets

Markets tend to be forward looking—improving even while the economic data and headlines remain bleak.

On average, stocks have found their low about five months before the end of past recessions. Notably, following the 12 previous quarters where the US economy fell at an annualized rate of 4% or more, as it did in the first quarter, the S&P 500 was higher a year later in all cases, averaging a gain of 27%.

17%

45%

38%

33%

22%

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35%

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47%

27%

Mar-49

Dec-53

Dec-57

Mar-58

Dec-60

Dec-70

Mar-75

Jun-80

Dec-81

Mar-82

Dec-08

Mar-09

Average

S&P 500 1-Year Performance Following 12 Worst GDP Quarters

Data Source: SunTrust IAG, FactSetPast performance does not guarantee future results

Stocks Historically Have Risen in Year Following the Economy’s Worst Quarters

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'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

Citi Economic Surprise Index

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3,500S&P 500 Price

The Citi US Economic Surprise Index—which measures how data is coming in relative to consensus forecasts—fell sharply during the pandemic as data came in worse than expected. However, the indicator has started to improve from a deeply negative level. This is important as stocks tend to move more on how data comes in relative to expectations as opposed to whether data is good or bad on an absolute basis.

Data Source: SunTrust IAG, FactSetPast performance does not guarantee future results

Economic Surprise Index Turning Up

Beyond stimulus, a key reason the S&P 500 has held up despite weak economic data is sector composition. The S&P 500 has a much greater weighting to growth and defensive sectors; these sectors are down less on a price and earnings basis relative to cyclicals that have a smaller weighting. That said, cyclicals are acting better recently and should continue to do well near term as the economy reopens.

*Sectors include mix of growth, defense and/or cyclical exposureData Source: SunTrust IAG, Bloomberg

Making Sense of the Perceived Disconnect Between the Equity Market and Economy

S&P 500 Sector

S&P 500Sector Weight

% Below52-Week

High

3-Month Change in

Forward EPS

Growth & Defensive SectorsTechnology 26% -5% -5%Health Care 15% -3% -4%Communication Services 11% -6% -15%Consumer Staples 7% -8% -5%Utilities 3% -15% 0%Average -7% -6%

Cyclical Sectors Financials 11% -25% -31%Industrials 8% -21% -36%Energy 3% -38% -89%Materials 3% -10% -18%Average -23% -43%

Other*Consumer Discretionary 11% -4% -41%Real Estate 3% -16% -9%Average -10% -25%

S&P 500 Sector Weightings

Growth/Defensive,

62%

Cyclical, 24%

Other, 14%

1,5001,7001,9002,1002,3002,5002,7002,9003,1003,3003,500

S&P 500In late May, a price-based measure of buying pressure reached an important threshold—the percentage of stocks in the S&P 500 trading above their 50-day moving average price breached 90% for only the 16th time since 1990*.

Following prior periods where the 90% threshold was reached, the S&P 500 was higher one year later in 14 of 15 instances, with an average gain of 16%.

*The 50 day-moving average is a security’s average closing price over the past 50 trading days. In general, a stock price trading above its 50-day moving average is viewed as a positive sign and denotes a security that is trending higher and vice versa. *Only first signal used in each instance (clusters removed)Past performance does not guarantee future resultsData Source: FactSet, SunTrust IAG

Market Broadening Out as Historically Reliable Technical Indicator Reaches Important Threshold

0102030405060708090

100

'16 '17 '18 '19 '20

% S&P 500 Stocks Above 50-Day Moving Average

13x

15x

17x

19x

21x

23x

$120

$140

$160

$180

2017 2018 2019 2020

2000

2500

3000

3500Valuations on the overall market are stretched. That said, price-to-earnings ratios are distorted due to the sharp drop in earnings during the pandemic, and markets are looking at 2020 as a write-off year. The good news is that earnings are showing signs of stabilization. Either way, the market on an absolute basis is not cheap.

Data Source: SunTrust IAG, FactSet

US Valuations Stretched though Earnings Estimates Tentatively Stabilizing

21.9x

S&P 500

Forward Price-to-Earnings

Forward 12-Month Earnings Estimates

18.5x 19.0x

While absolute valuations are high, the equity risk premium (ERP)* suggests stocks remain attractive on a relative basis and are in a zone that has corresponded with double-digit market gains, on average, over the next 12 months.

4.7%

10.7%

7.6%

5.0% 5.2%

11.4%

12.9%

Less Than-200

-200 to -100

-100 to 0 0 to 100 100 to 200200 to 300 GreaterThan 300

Average 12-Month Forward S&P 500 Returns by ERP Tranche

(1960-Current)

-600

-400

-200

0

200

400

600

800

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20

S&P 500: Equity Risk Premium:Earnings Yield Minus 10-Year Treasury Yield

Past performance does not guarantee future results. *The equity risk premium (ERP) compares the earnings yield of stocks (inverse of the P/E ratio) to the 10-year US Treasury yield. ERP is quantified in basis points (bps). One basis point = 0.01%Source: Strategas, SunTrust IAG

Stocks Still Appear Attractive on a Relative Basis

Current

Average = 63

Stocks More Attractive

Stocks Less Attractive

338

900

3600

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

S&P 500

-$120,000

-$70,000

-$20,000

$30,000

$80,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(Mill

ions

)

Equity Fund Flows: 4-Week Rolling Sum(Mutual Funds + ETFs)

Past performance does not guarantee future resultsData Source: SunTrust IAG, Haver, FactSet

Market Climbing Wall of Worry as Fund Outflows Reach Record Despite Market RallyOver a four-week period ending in late May, equity outflows were more extreme than during the sharp market decline in March. Recent outflows have occurred during a period of rising stocks, which is unusual. Extreme outflows have tended to occur closer to market bottoms, and we view this as a positive from a contrarian view.

Aug '11 US Debt Downgrade Late Dec '18Fed/Tariffs

Mar '20COVID May '20; Rebound

Skepticism

-19%

-20% -35%

+36%

While fund outflows and many other sentiment indicators reflect skepticism, the put/call ratio is an outlier. It suggests a degree of short-term complacency as investors show little demand to hedge market downside.

In aggregate, we still view sentiment as a slight positive from a contrarian perspective.

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20

Demand to Hedge Market Downside is LowCBOE Equity 10-day Put/Call Ratio*

Fear

Data Source: SunTrust IAG, CBOE, FactSetThe Put/Call Ratio is an indicator that shows put volume relative to call volume. Put options are used to hedge against market weakness or bet on a decline. Call options are used to bet on market upside. Sentiment is deemed excessively bearish when the Put/Call Ratio is trading at relatively high levels, and excessively bullish when at relatively low levels.

Unlike the Majority of Sentiment Indicators, Put/Call Ratio Suggests Short-Term Complacency

Fear

Complacency

75

80

85

90

95

100

105

110

115

120

125

2017 2019 2020

Global EarningsIndexed at 100 as of 12/31/2017

US EAFE UK Japan EM

US

EMJapan

UK

EAFE

Regional: Valuations & Earnings

We hold a US equity bias and expect the US to maintain a premium valuation relative to the globe. US profits were stronger relative to other regions prior to the decline and should rebound quicker. This is because US stocks’ blue chip bias and sector composition are geared more toward defensive and growth-oriented areas, such as tech and healthcare.

22.0

15.9 14.4

15.012.8

5x

10x

15x

20x

25x

30x

35x

US EAFE UK Japan EM

Current Forward P/E and Range Since 2003

Average Current

Data Source: SunTrust IAG, FactSet, MSCIPast performance does not guarantee future results.Earnings are next twelve months’ earnings in local currency.US = MSCI USA; Japan = MSCI Japan; EAFE = MSCI EAFE; EM = MSCI EM; UK = MSCI UK; Europe = MSCI EMU

Although we maintain a longer-term US bias, from a shorter-term perspective, the underperformance of the international developed markets is near an extreme where it has tended to bounce.

The potential of Europe moving closer to a fiscal union and the €750 billion proposed European recovery fund are also positive. In addition, Japan is ramping up its fiscal stimulus.

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

International Developed Minus US Returns:6-Month Rolling Performance

Data Source: SunTrust IAG, FactSetPast performance does not guarantee future results.

International Developed Markets’ Underperformance Near Short-Term Extreme

Int’l Developed Outperforming US

Int’l Developed Underperforming US

We hold a large cap bias as these companies should navigate the current backdrop better given stronger balance sheets and profitability trends. However, even after the recent bounce, the underperformance of small caps remains extreme and the short-term rebound is likely to be extended.

-30%

-20%

-10%

0%

10%

20%

30%

40%

'90 '95 '00 '05 '10 '15 '20

Small Cap Minus Large Cap Returns 6-Month Rolling Performance

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

'90 '95 '00 '05 '10 '15 '20

Percent of Non-EarnersLarge Caps vs. Small Caps

Large Cap = Russell 1000; Small Cap = Russell 2000Source: Strategas, SunTrust IAG; gray shading represents recessions.Past performance does not guarantee future results.

Maintain Large Cap Bias but Small Caps’ Underperformance Remains at Extreme

Small Cap Underperforming

Small Caps

Large Caps

Small Cap Outperforming

Value’s underperformance relative to Growth is the greatest since the technology bubble. Value has started to perform better recently as the economy reopens and investors look for catch up plays. On a short-term basis, this is likely to continue given the extreme performance.

Longer term, our view is investors will continue to pay a premium for growth companies given the outlook for an uneven global economic recovery and interest rates that are set to stay lower for longer.

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

Large Value Minus Large Growth Returns6-Month Rolling Returns

Data Source: SunTrust IAG, FactSetPast performance does not guarantee future results.

Value’s Underperformance At Short-Term Extreme

Value Outperforming

Value Underperforming

While the technology sector has concentration risks, its earnings remain much stronger than those for the overall market. Moreover, the sector is trading at less than a 10% P/E premium relative to the overall market versus a level that was more than double the valuation level reached during the bubble period.

0.0

0.5

1.0

1.5

2.0

2.5

0

20

40

60

80

100

120

140

160

180

200

'99 '01 '03 '05 '07 '09 '10 '12 '14 '16 '18 '20

Tech Relative P/E to S&P 500

Tech

Ear

ning

s Re

lativ

e to

S&P

500

Technology Relative Earnings & Valuation to S&P 500

Forward Relative Earnings (l-axis) Forward Relative Valuation (r-axis)

Tech earnings strongerthan market

Technology = S&P 500 Technology SectorData Source: SunTrust IAG, FactSet

Fundamentals Still Remain Strong in Growth Sectors Such as Technology

Tech relative valuationsnot extreme

Recently we have seen sharp rallies in some of the beaten up, economically-sensitive sectors. This is likely to continue near term, and we see value in having some cyclical exposure. Longer term, we still see more sustainable leadership in growth areas, such as technology and health care.

Data Source: SunTrust IAG, FactSet. A rising line denotes improving sector performance relative to the S&P 500 and vice versa. Past performance does not guarantee future results.

US Sector Relative Price Trends

95105115125

'19 '20

Technology

95

100

105

110

'19 '20

Communications Services

85

105

125

'19 '20

Materials

90

100

110

120

'19 '20

Consumer Staples

406080

100

'19 '20

Energy

758595

105

'19 '20

Industrials

90100110120

'19 '20

Health Care

8595

105115

'19 '20

Utilities

85

95

105

'19 '20

Consumer Discretionary

758595

105

'19 '20

Financials

80

90

100

110

'19 '20

Real Estate

Cyclical Sectors Defensive Sectors

Fixed Income

US Treasury yields remain suppressed by central bank intervention, demand for quality, and uncertainty surrounding the global recovery. Volatility has been unusually subdued recently.

Data Source: SunTrust IAG, Bloomberg

10-Year US Treasury Yield Set to Stay In Low Range

3.99%

1.39%

3.03%

1.36%

3.24%

0.54%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

10-Year US Treasury Yield

The US Treasury curve underwent a modest steepening over the last month, but absolute yields remain extremely low.

Short-term yields are expected to remain anchored by Federal Reserve (Fed) policy while the longer end is expected to nudge higher as the economy recovers and US Treasury issuance ramps up to fund fiscal stimulus packages.


US Treasury Yield Curve Has Steepened Modestly Over the Past Month

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3Mo

1Yr

2Yr

3Yr

5Yr

7Yr

10Yr

30Yr

US Treasury Yield Curve Comparison

End of 1Q 2020

May 31, 2020

Year-end 2019

-2%

0%

2%

4%

6%

8%

10%

US 1

0-Yr

Tre

asur

y

US C

ore

Taxa

ble

Mun

is

IG C

orp

MBS

Intl

Dev

Mrk

ts

HY

Corp

HY

Mun

i

Pref

erre

ds

Conv

ertib

les

EM H

ard

Cur

EM L

oc C

ur

Current Yield vs. 10-Year RangeRange Current Yield

We still see relative value in investment grade and high yield corporate bonds where there is a measure of support from the Fed.

Data Source: SunTrust IAG; FactSet, BofA; yield to worst shown except for preferreds (yield to maturity) and convertibles (current yield)US 10-Yr Treasury = Bloomberg Barclays US Treasury Bellwethers (10-Yr); US Core Taxable = Bloomberg Barclays US Aggregate; Municipals = Bloomberg Barclays Municipal Bond 1-15 Year; US Corporates = Bloomberg Barclays US Corporate IG; MBS=Bloomberg Barclays US MBS; Intl Dev Mkts = ICE BofA Global Government ex US (USD Unhedged); HY Corp = ICE BofA US High Yield; HY Muni = Bloomberg Barclays Municipal High Yield; Preferreds = ICE BofA Fixed Rate Preferred; Convertibles = ICE BofA US Convertible; EM Hard Cur = JP Morgan EMBI Global Diversified; EM Loc Cur = JP Morgan GBI-EM Global Diversified. Past performance does not guarantee future results. Investing in the bond market is subject to certain risks, including market, interest rate, issuer and inflation risk; investments may be worth more or less than the original cost when redeemed. The value of most bond strategies and fixed income securities are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise, and values rise when interest rates decline.

Relative Value in Fixed Income

High Quality Higher Risk

In May, the Fed’s balance sheet surpassed $7 trillion for the first time ever. The central bank’s purchases of US Treasuries and MBS continued in May, albeit at a slower pace.

The Fed’s lending facilities will become a larger portion of its balance sheet as they are tapped to purchase investment grade and high yield corporate bonds, municipal bonds, and exchange-traded funds.


Fed Balance Sheet Surpasses $7 Trillion Mark, Destined to Grow Further

$0

$1

$2

$3

$4

$5

$6

$7

$8

12/31/2019 01/31/2020 02/29/2020 3/31/2020 4/30/2020 5/31/20

US Federal Reserve Balance Sheet ($T)

US Treasury Securities Mortgage-Backed Securities Loans Other

$7.1 T


Credit Continues to Outperform

Despite record new issuance, credit spreads continued to tighten in May. The combination of Fed purchases and investors’ seeking yield is spurring demand.

While we still favor an overweight to this sector, additional spread tightening is likely limited in the near term.

0%

1%

2%

3%

4%

5%

0%

2%

4%

6%

8%

10%

12%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

IG Corporate Spreads

HY

Corp

orat

e Sp

read

s

IG and HY Corporate Credit Spreads (% Above Treasuries)HY Corporate IG Corporate

Year to date through May, investment grade corporate bond issuance surpassed the $1 trillion threshold at the fastest pace on record.

US companies’ liquidity needs and the Fed’s pledged backstop fueled unprecedented issuance; however, the issuance was matched by equally voracious demand.


Fed Intervention Aids Supply and Demand of Investment Grade Corporates

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

Investment Grade Corporate Bond Issuance (in $Trillions)

Municipal bond valuations moved to less favorable levels over the last month, but on a relative basis, municipal bonds still offer value. The longer end of the curve appears more attractive than the short-end of the curve.

63.0% 65.1% 64.8%76.2% 83.6%

448.7%

370.3%

217.3% 222.4%

188.8%

30.2%

95.9%109.9%

125.5% 124.0%

1-Year 3-Year 7-Year 10-Year 20-Year

Muni Yields as a % of US Treasury Yields12/31/2019 4/30/2020 5/31/2020

Data Source: SunTrust IAG, Bloomberg. Interest income may be subject to the federal alternative minimum tax. Other state and local taxes may apply.

Municipals Post Strongest Rally in 10 Years in May

CONTRIBUTORS

Chief Market Strategist, Managing Director,Portfolio & Market Strategy

KEITH LERNER, CFA, CMT

Director, US Macro Strategist, Portfolio & Market Strategy

MICHAEL SKORDELES, AIF

Director, Global Macro Strategist, Portfolio & Market Strategy

EYLEMSENYUZ

Director, Portfolio & Market Strategy

SABRINA BOWENS-RICHARD, CFA, CAIA

Managing Director, Fixed Income Strategies

ANDREWRICHMAN, CTFA

Head of Fixed Income Strategy and Services, BB&T Scott & Stringfellow

CHIP HUGHEY, CFA

Director, Portfolio & Market Strategy

SHELLY SIMPSON, CFA, CAIA

IAG Associate, Portfolio & Market Strategy

DYLANKASE, CFA

Chief Wealth Market Strategist, BB&T Wealth

JEFF TERRELL, CFA

Research Analyst, Portfolio & Market Strategy

EMILYNOVICK, CFA, CFP®

INVESTMENT ADVISORY GROUP

Oliver Merten, CFA, CFP®Managing Director

Erin HoganManager

Adam White, CFASr. Research Analyst

Charles EastSr. Research Analyst

Scott Yuschak, CFASr. Research Analyst

Aki Pampush, CFAManaging Director

W. Moultrie Dotterer, CFAManaging Director, BB&T Scott & Stringfellow

Charles ReddingEquity Product Manager, BB&T Scott & Stringfellow

Vernon Plack, CFA, CMTDir. Of Private Client Research, BB&T Scott & Stringfellow

John HolecekAssociate

Andrew Richman, CTFAManaging Director

Chip Hughey, CFAHead of Fixed Income Strategy and Services, BB&T Scott & Stringfellow

Shelly Simpson, CFA, CAIADirector

Sabrina Bowens-Richard, CFA, CAIA Director

Emily Novick, CFA, CFP®Research Analyst

Mike Skordeles, AIF®Director, US Macro Strategist

Eylem SenyuzDirector, Global Macro Strategist

Dylan Kase, CFAAssociate

Keith Lerner, CFA, CMTChief Market Strategist

Jeff Terrell, CFASenior Vice President, Chief Wealth Market Strategist, BB&T Wealth

PORTFOLIO & MARKET STRATEGY

EQUITY & DERIVATIVES STRATEGIES

Spencer BoggessManaging Director

Len LebovDirector

Mohan BadgujarDirector

Sejal PatelDirector

Haley LawsonAssociate

Ryan Taylor, CFA, CAIAAssociate

Noah Harris, CFADirector

Colin Fox, CTFAAssociate

ALTERNATIVE INVESTMENTS RESEARCH

Ric Mayfield, CFA, CAIAManaging Director

Tracey DevineDirector

Chris Hett, CFAResearch Analyst

Alison Majors, CFA, CFP®Director

Diane SchmidtResearch Analyst

Kelly Frohsin, CIMA®, CFP®Director

Thomas TomanResearch Analyst

Benardo RichardsonAssociate

TRADITIONAL MANAGER EVALUATION

Ravi UgaleManaging Director

Will RepathDirector

PRIVATE EQUITY & CREDIT RESEARCH

INVESTMENT COMMUNICATIONS

Ernest Dawal, Jr., CFAChief Investment Officer

FIXED INCOME STRATEGIES

Garrett DavisAssociate

Glenn Dellinger, CFAAnalyst

Zachary NataleTrader

Wayne M. Pettway, CFADirector

Stephen Freilich, CFADirector

Rich Petruzzo, CFAPortfolio Trader

John GangiPortfolio Trader

Important DisclosuresThis material was provided by SunTrust Private Wealth Management for use by BB&T Wealth.Advisory managed account programs entail risks, including possible loss of principal and may not be suitable for all investors. Please speak to your advisor to request a firm brochure which includes program details, including risks, fees and expenses.International investments are subject to special risks, such as political unrest, economic instability, and currency fluctuations. Emerging Markets: Investing in the securities of such companies and countries involves certain considerations not usually associated with investing in developed countries, including unstable political and economic conditions, adverse geopolitical developments, price volatility, lack of liquidity, and fluctuations in currency exchange rate.BB&T Wealth is a marketing name used by Truist Financial Corporation and the following affiliates: Banking products and services, including loans and deposit accounts, are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank and SunTrust Delaware Trust Company. Securities, brokerage accounts and /or insurance (including annuities) are offered by SunTrust Investment Services, Inc., BB&T Securities, LLC, and P.J. 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Mutual fund products are advised by Sterling Capital Management, LLC.While this information is believed to be accurate, SunTrust Banks, Inc., now Truist Financial Corporation, including its affiliates, does not guarantee the accuracy, completeness or timeliness of, or otherwise endorse these analyses or market data.The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but Truist Financial Corporation makes no representation or guarantee as to their timeliness, accuracy or completeness or for their fitness for any particular purpose. The information contained herein does not purport to be a complete analysis of any security, company, or industry involved. This material is not to be construed as an offer to sell or a solicitation of an offer to buy any security. Opinions and information expressed herein are subject to change without notice. STIS and/or its affiliates, including your Advisor, may have issued materials that are inconsistent with or may reach different conclusions than those represented in this commentary, and all opinions and information are believed to be reflective of judgments and opinions as of the date that material was originally published. STIS is under no obligation to ensure that other materials are brought to the attention of any recipient of this commentary. Comments regarding tax implications are informational only. Truist and its representatives do not provide tax or legal advice. You should consult your individual tax or legal professional before taking any action that may have tax or legal consequences.Investments involve risk and an investor may incur either profits or losses. Past performance should not be taken as an indication or guarantee of future performance. STIS/STAS shall accept no liability for any loss arising from the use of this material, nor shall STIS/STAS treat any recipient of this material as a customer or client simply by virtue of the receipt of this material. The information herein is for persons residing in the United States of America only and is not intended for any person in any other jurisdiction. Investors may be prohibited in certain states from purchasing some over-the-counter securities mentioned herein. The information contained in this material is produced and copyrighted by Truist Financial Corporation and any unauthorized use, duplication, redistribution or disclosure is prohibited by law. STIS/STAS’s officers, employees, agents and/or affiliates may have positions in securities, options, rights, or warrants mentioned or discussed in this material.Asset classes are represented by the following indexes. An investment cannot be made directly into an index. S&P 500 Index is comprised of 500 widely-held securities considered to be representative of the stock market in general.Equity is represented by the MSCI ACWI captures large and mid cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries*. With 2,757 constituents, the index covers approximately 85% of the global investable equity opportunity set Fixed Income is represented by the Barclays Aggregate Index. The index measures the performance of the U.S. investment grade bond market. The index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States – including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year. Commodities are represented by the Bloomberg Commodity Index which is a composition of futures contracts on physical commodities. It currently includes a diversified mix of commodities in five sectors including energy, agriculture, industrial metals, precious metals and livestock. The weightings of the commodities are calculated in accordance with rules that ensure that the relative proportion of each of the underlying individual commodities reflects its global economic significance and market liquidity. Cash is represented by the ICE BofAML US Treasury Bill 3 Month Index which is a subset of the ICE BofAML 0-1 Year US Treasury Index including all securities with a remaining term to final maturity less than 3 months. US Large Cap Equity is represented by the S&P 500 Index which is an unmanaged index comprised of 500 widely-held securities considered to be representative of the stock market in general. US Mid Cap is represented by the S&P MidCap 400® provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500®, measures the performance of mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

Important DisclosuresUS Small Cap Core Equity is represented by the Russell 2000 Index which is a measure of the performance of the small-cap segment of the US equity universe. The Russell 2000 is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.International Developed Markets is represented by the MSCI EAFE Index is an equity index which captures large and mid cap representation across 21 Developed Markets countries* around the world, excluding the US and Canada. With 921 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Emerging Markets is represented by the MSCI Emerging Markets Index captures large and mid cap representation across 24 Emerging Markets (EM) countries*. With 1,125 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Growth is represented by the Russell 1000® Growth Index measures the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values. Value is represented by the Russell 1000® Value Index measures the performance of those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values US Government Bonds are represented by the Bloomberg Barclays US Government Index which is an unmanaged index comprised of all publicly issued, non-convertible domestic debt of the US government or any agency thereof, or any quasi-federal corporation and of corporate debt guaranteed by the US government US Mortgage-Backed Securities are represented by the US Mortgage-Backed Securities (MBS) Index which covers agency mortgage-backed pass-through securities (both fixed-rate and hybrid ARM) issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). US Investment Grade Corporate Bonds are represented by the Bloomberg Barclays US Corporate Investment Grade Index which is an unmanaged index consisting of publicly issued US Corporate and specified foreign debentures and secured notes that are rated investment grade (Baa3/BBB- or higher) by at least two ratings agencies, have at least one year to final maturity and have at least $250 million par amount outstanding. US High Yield Corp is represented by the ICE BofAML U.S. High Yield Index tracks the performance of below investment grade, but not in default, US dollar denominated corporate bonds publicly issued in the US domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody’s and S&P. Floating Rate Bank Loans are represented by the Credit Suisse Leveraged Loan Index. The index represents tradable, senior-secured, U.S.-dollar-denominated non-investment-grade loans. Global Equity is represented by the MSCI All World Country (ACWI) Index which is defined as a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI Index consists of 48 country indices comprising 24 developed markets countries and 24 emerging markets countries. Emerging Markets Equity is represented by the MSCI EM Index which is defined as a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets countries Intermediate Term Municipal Bonds are represented by the Bloomberg Barclays Municipal Bond Blend 1-15 Year (1-17 Yr) is an unmanaged index of municipal bonds with a minimum credit rating of at least Baa, issued as part of a deal of at least $50 million, that have a maturity value of at least $5 million and a maturity range of 12 to 17 years. US Core Taxable Bonds are represented by the Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). US Government Bonds are represented by the Bloomberg Barclays US Government Index which is an unmanaged index comprised of all publicly issued, non-convertible domestic debt of the US government or any agency thereof, or any quasi-federal corporation and of corporate debt guaranteed by the US government. US IG Corporate Bonds are represented by the Bloomberg Barclays US Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD denominated securities publicly issued by US and non-US industrial, utility and financial issuers. US High Yield Corporate Bonds are represented by the ICE BofAML US HY Master Index which is an index that tracks US dollar denominated debt below investment grade corporate debt publicly issued in the US domestic market.

Important DisclosuresS&P 500 Information Technology Index – a capitalization-weighted index that is composed of those companies included in the S&P 500 that are classified as members of the information technology sector based on GICS® classification.S&P 500 Financials Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the financials sector based on GICS® classification.S&P 500 Energy Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the energy sector based on GICS® classification.S&P 500 Materials Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the materials sector based on GICS® classification.S&P 500 Industrials Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the industrials sector based on GICS® classification.S&P 500 Consumer Discretionary Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the consumer discretionary sector based on GICS® classification.S&P 500 Communication Services Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the communication services sector based on GICS® classification.S&P 500 Utilities Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the utilities sector based on GICS® classification.S&P 500 Consumer Staples Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the consumer staples sector based on GICS® classification.S&P 500 Health Care Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the health care sector based on GICS® classification.S&P 500 Real Estate Index – a capitalization weighted index that is composed of those companies included in the S&P 500 that are classified as members of the real estate sector based on GICS® classification.

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CN 2020-XXXX EXP 12-2020

Slide Number 1Slide Number 2House Views��Slide Number 4Asset Class Total Returns Through May 2020Asset Class View, Forecasts & Valuation* Slide Number 7Global Manufacturing Tentatively Stabilizing, Albeit at Still Depressed LevelsGlobal Fiscal & Monetary Response HugeSlide Number 10US Economy: Wide Range of Potential OutcomesShort Recession and ‘Swoosh’-Shaped RecoveryUS Fiscal Response Extraordinary in Size & Speed Massive Spike in Personal SavingsUS Economy: Slowly Reopening But UnevenEquities�Stock Market Outlook: Bear Versus Bull CaseCoronavirus Shock Led to Sharpest Market Move From All Time High to Bear MarketMarket Snapback Among Sharpest in History & On Par With Kickoff to 1982 and 2009 Bull MarketsStocks Historically Have Risen in Year Following the Economy’s Worst QuartersEconomic Surprise Index Turning Up Making Sense of the Perceived Disconnect Between the Equity Market and EconomyMarket Broadening Out as Historically Reliable Technical Indicator Reaches Important Threshold�US Valuations Stretched though Earnings Estimates Tentatively StabilizingStocks Still Appear Attractive on a Relative BasisMarket Climbing Wall of Worry as Fund Outflows Reach Record Despite Market RallyUnlike the Majority of Sentiment Indicators, Put/Call Ratio Suggests Short-Term ComplacencyRegional: Valuations & EarningsInternational Developed Markets’ Underperformance Near Short-Term ExtremeMaintain Large Cap Bias but Small Caps’ Underperformance Remains at ExtremeValue’s Underperformance At Short-Term ExtremeFundamentals Still Remain Strong in Growth Sectors Such as TechnologyUS Sector Relative Price TrendsFixed Income�10-Year US Treasury Yield Set to Stay In Low RangeUS Treasury Yield Curve Has Steepened Modestly Over the Past MonthRelative Value in Fixed IncomeFed Balance Sheet Surpasses $7 Trillion Mark, Destined to Grow FurtherCredit Continues to Outperform Fed Intervention Aids Supply and Demand of Investment Grade CorporatesMunicipals Post Strongest Rally in 10 Years in MaySlide Number 42Slide Number 43Important DisclosuresImportant DisclosuresImportant Disclosures

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Investment Advisory Group, Market Navigator...Investment Advisory Group, SunTrust Advisory Services, Inc. TABLE OF CONTENTS Monthly Letter Asset Class Returns House Views 1. HOUSE