Markets, He Wrote - ACG

By: Anirban BasuSage Policy Group, Inc.

May 23rd, 2017

Markets, He Wrote

On Behalf of

ACG Maryland Deal Forum 2017

Macro P.I.(Just How Hairy is the

Global Situation?)

Photo: Flixter.com

0.2%1.7%

1.1%2.6%

7.2%6.6%6.4%

1.4%3.0%

2.6%4.5%

2.3%3.1%

1.9%2.0%

1.2%2.6%

0.8%1.6%

1.4%1.7%2.0%

-6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

BrazilMexico

Latin America & the CaribbeanMiddle East, North Africa, Afghanistan, & Pakistan

India (3)China

Emerging & Developing AsiaRussia

Emerging & Developing EuropeSub-Saharan Africa

Emerging Market & Developing EconomiesUnited States

AustraliaCanada

United KingdomJapan (2)

SpainItaly

GermanyFrance

Euro AreaAdvanced Economies

Annual % Change

Estimated Growth in Output by Select Global Areas2017 Projected

2017 Proj. Global Output Growth: 3.5%Source: International Monetary Fund: World Economic Outlook Database, April 2017.

Notes: 1. Real effective exchange rates are assumed to remain constant at the levels prevailing during February 1–March 1, 2017.Economies are listed on the basis of economic size. The aggregated quarterly data are seasonally adjusted. 2. Japan’s historicalnational accounts figures reflect a comprehensive revision by the national authorities, released in December 2016. The main revisions are the switch from the System of National Accounts 1993 to the System of National Accounts 2008 and the updating of the benchmark year from 2005 to 2011. 3. For India, data and forecasts are presented on a fiscal year basis and GDP from 2011onward is based on GDP at market prices with FY2011/12 as a base year.

International Population Dynamics, 16 Largest Nations

Source: United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population Prospects: The 2015 Revision.

NationPopulation (Millions)

% Change2015 2050 Net Change

Nigeria 182.2 398.5 216.3 118.7%Ethiopia 99.4 188.5 89.1 89.6%Egypt 91.5 151.1 59.6 65.1%Pakistan 188.9 309.6 120.7 63.9%Philippines 100.7 148.3 47.6 47.2%India 1,311.1 1,705.3 394.3 30.1%Mexico 127.0 163.8 36.7 28.9%Bangladesh 161.0 202.2 41.2 25.6%Indonesia 257.6 322.2 64.7 25.1%United States 321.8 388.9 67.1 20.9%Vietnam 93.4 112.8 19.3 20.7%Brazil 207.8 238.3 30.4 14.6%China 1,376.0 1,348.1 -28.0 -2.0%Germany 80.7 74.5 -6.2 -7.7%Russian Federation 143.5 128.6 -14.9 -10.4%Japan 126.6 107.4 -19.2 -15.1%World 7.3 billion 9.7 billion 2.4 billion 32.3%

*For statistical purposes, the data for China do not include Hong Kong and Macao, Special Administrative Regions (SAR) of China, and Taiwan Province of China.

Niamey Vice(Fertility Rates by Country, 2014)

Source: World Bank, World Development Indicators

Top 15 Bottom 15

Rank* Country Fertility Rate Rank* Country Fertility

Rate

1 Niger 7.60 186 Germany 1.39

2 Somalia 6.46 186 Italy 1.39

3 Mali 6.23 188 Malta 1.38

4 Chad 6.16 189 Hungary 1.35

5 Angola 6.08 190 Slovak Republic 1.34

6 Congo, Dem. Rep. 6.01 191 Greece 1.30

7 Burundi 5.95 192 Poland 1.29

8 Uganda 5.78 193 Spain 1.27

9 Gambia, The 5.72 194 Bosnia and Herzegovina 1.26

10 Nigeria 5.65 194 Moldova 1.26

11 Burkina Faso 5.52 196 Singapore 1.25

12 Mozambique 5.36 197 Macao SAR, China 1.24

13 Zambia 5.35 198 Hong Kong SAR, China 1.23

14 Tanzania 5.15 200 Portugal 1.21

15 Malawi 5.13 200 Korea, Rep. 1.21

*Rank among 200 countries for which data are available for the most recent year (2014)**Total fertility rate represents the number of children that would be born to a woman if she were to live to the end of her childbearing years and bear children in accordance with age-specific fertility rates of the specified year.

Global Debt to Exacerbate Slow Growth?

Sources: 1. International Monetary Fund. October 2016. “World Economic Outlook: Subdued Demand: Symptoms and

Remedies.” 2. International Monetary Fund (IMF). October 2016. “Fiscal Monitor: Debt—Use It Wisely.”

• According to the IMF, global debt reached an all-time highin 2015;

• At $152 trillion, global gross debt of the nonfinancial sector now represents 225% of global GDP;

• About 2/3 of this debt is in the private sector;

• Current low nominal-growth environment is making adjustment difficult, setting the stage for a “vicious feedback loop” in which lower growth hampers deleveraging and the debt overhang exacerbates the slowdown.2

Note: The nonfinancial sector comprises the general government, nonfinancial firms, and households. Gross debt represents the unconsolidated liabilities of the three.

$0

$20

$40

$60

$80

$100

$120

$140

Ap

r-0

1A

ug

-01

Dec

-01

Ap

r-0

2A

ug

-02

Dec

-02

Ap

r-0

3A

ug

-03

Dec

-03

Ap

r-0

4A

ug

-04

Dec

-04

Ap

r-0

5A

ug

-05

Dec

-05

Ap

r-0

6A

ug

-06

Dec

-06

Ap

r-0

7A

ug

-07

Dec

-07

Ap

r-0

8A

ug

-08

Dec

-08

Ap

r-0

9A

ug

-09

Dec

-09

Ap

r-10

Au

g-1

0D

ec-1

0A

pr-

11A

ug

-11

Dec

-11

Ap

r-12

Au

g-1

2D

ec-1

2A

pr-

13A

ug

-13

Dec

-13

Ap

r-14

Au

g-1

4D

ec-1

4A

pr-

15A

ug

-15

Dec

-15

Ap

r-16

Au

g-1

6D

ec-1

6A

pr-

17

$/B

arr

el

April 2017:$51.12 /Barrel

NYMEX Crude Oil Future Prices in U.S. DollarsApril 2001 through April 2017

Source: U.S. Energy Information Administration

*Month of April = average of daily prices from 4/3-4/28

US$ NominalBase metals include aluminum, copper, lead, nickel, tin and zinc.Precious metals include gold, platinum, and silver.

Base Metals

Iron Ore

Precious Metals

25

45

65

85

105

125

145

165

Ap

r-0

7

Au

g-0

7

Dec

-07

Ap

r-0

8

Au

g-0

8

Dec

-08

Ap

r-0

9

Au

g-0

9

Dec

-09

Ap

r-10

Au

g-1

0

Dec

-10

Ap

r-11

Au

g-1

1

Dec

-11

Ap

r-12

Au

g-1

2

Dec

-12

Ap

r-13

Au

g-1

3

Dec

-13

Ap

r-14

Au

g-1

4

Dec

-14

Ap

r-15

Au

g-1

5

Dec

-15

Ap

r-16

Au

g-1

6

Dec

-16

Ap

r-17

2010

=10

0

Metal Price IndicesApril 2007 through April 2017

Source: The World Bank

0

1,000

2,000

3,000

4,000

5,000

May

-09

Sep

-09

Jan

-10

May

-10

Sep

-10

Jan

-11

May

-11

Sep

-11

Jan

-12

May

-12

Sep

-12

Jan

-13

May

-13

Sep

-13

Jan

-14

May

-14

Sep

-14

Jan

-15

May

-15

Sep

-15

Jan

-16

May

-16

Sep

-16

Jan

-17

May

-17

Jan. 4, 1985: 1,000

May 19th

956

The Baltic Dry Index (BDI) is a measure of the price of shipping major raw materials such as metals, grains, and fossil fuels by sea. The BDI is a composite of 3 sub-indices, each covering a different carrier size: Capesize, Panamax, and Supramax.

Baltic Dry IndexMay 2009 through May 2017

Source: Quandl.com

USA CSI

Photo: AMCNetworks.com

(Commercial Situation Investigation)

Gross Domestic Product1990Q1 through 2017Q1*

Source: Bureau of Economic Analysis

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%19

90

Q1

199

0Q

419

91Q

319

92Q

219

93Q

119

93Q

419

94

Q3

199

5Q2

199

6Q

119

96

Q4

199

7Q3

199

8Q

219

99

Q1

199

9Q

420

00

Q3

200

1Q2

200

2Q1

200

2Q4

200

3Q3

200

4Q

220

05Q

120

05Q

420

06

Q3

200

7Q2

200

8Q

120

08

Q4

200

9Q

320

10Q

220

11Q

120

11Q

420

12Q

320

13Q

220

14Q

120

14Q

420

15Q

320

16Q

220

17Q

1

% C

ha

ng

e f

rom

Pre

ced

ing

Pe

rio

d (

SA

AR

)

2017Q1: +0.7%

*1st (Advance) Estimate

Contributions to GDP Growth by Component 2016Q2 – 2017Q1*


-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

PersonalConsumption

GovernmentSpending

Net Exports GrossInvestment

2.9

-0.3

0.2

-1.3

2.0

0.1

0.9

0.5

2.4

0.0

-1.8

1.5

0.23

-0.30

0.07

0.69

SA

AR

(%

)

2016Q2 2016Q3 2016Q4 2017Q1

1.4

3.5

2.1

0.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

GDP

Pe

rce

nt

Ch

an

ge

fro

m P

rece

din

g P

eri

od

(S

AA

R)

2017Q1: +0.7%


Net Change in U.S. Jobs, BLSApril 2002 through April 2017

Source: U.S. Bureau of Labor Statistics

-1000

-800

-600

-400

-200

0

200

400

600A

pr-

02

Au

g-0

2D

ec-0

2A

pr-

03

Au

g-0

3D

ec-0

3A

pr-

04

Au

g-0

4D

ec-0

4A

pr-

05

Au

g-0

5D

ec-0

5A

pr-

06

Au

g-0

6D

ec-0

6A

pr-

07

Au

g-0

7D

ec-0

7A

pr-

08

Au

g-0

8D

ec-0

8A

pr-

09

Au

g-0

9D

ec-0

9A

pr-

10A

ug

-10

Dec

-10

Ap

r-11

Au

g-1

1D

ec-1

1A

pr-

12A

ug

-12

Dec

-12

Ap

r-13

Au

g-1

3D

ec-1

3A

pr-

14A

ug

-14

Dec

-14

Ap

r-15

Au

g-1

5D

ec-1

5A

pr-

16A

ug

-16

Dec

-16

Ap

r-17

Th

ou

san

ds

April 2017:

+211K

National Nonfarm Employmentby Industry SectorApril 2016 v. April 2017


-46

21

40

56

173

173

179

213

304

512

612

-100 0 100 200 300 400 500 600 700

Information

Mining and Logging

Manufacturing

Other Services

Construction

Financial Activities

Government

Trade, Transportation, and Utilities

Leisure and Hospitality

Education and Health Services

Professional and Business Services

Thousands, SA

All told 2,237K jobs gained

U.S. Employment to Population RatioApril 2000 – April 2017


Note: Civilian employment-population ratio, population 16 years and over, seasonally adjusted (SA).

58.0

59.0

60.0

61.0

62.0

63.0

64.0

65.0

Ap

r-0

0O

ct-0

0A

pr-

01

Oct

-01

Ap

r-0

2O

ct-0

2A

pr-

03

Oct

-03

Ap

r-0

4O

ct-0

4A

pr-

05

Oct

-05

Ap

r-0

6O

ct-0

6A

pr-

07

Oct

-07

Ap

r-0

8O

ct-0

8A

pr-

09

Oct

-09

Ap

r-10

Oct

-10

Ap

r-11

Oct

-11

Ap

r-12

Oct

-12

Ap

r-13

Oct

-13

Ap

r-14

Oct

-14

Ap

r-15

Oct

-15

Ap

r-16

Oct

-16

Ap

r-17

April 2017:60.2%

Employment Growth, U.S. States (SA) April 2016 v. April 2017 Percent Change


RANK STATE % RANK STATE % RANK STATE %

1 NEVADA 3.6 14 MONTANA 1.7 35 PENNSYLVANIA 0.8

2 UTAH 3.3 19 KENTUCKY 1.6 35 VERMONT 0.8

3 FLORIDA 2.6 20 ARKANSAS 1.5 37 OHIO 0.7

3 GEORGIA 2.6 21 CALIFORNIA 1.4 38 DELAWARE 0.6

3 IDAHO 2.6 21 HAWAII 1.4 38 MAINE 0.6

6 WASHINGTON 2.5 21 SOUTH CAROLINA 1.4 40 DISTRICT OF COLUMBIA 0.5

7 OREGON 2.3 24 ALABAMA 1.3 40 IOWA 0.5

8 TEXAS 2.2 24 MISSOURI 1.3 42 ILLINOIS 0.4

9 ARIZONA 2.0 24 NEW JERSEY 1.3 42 NORTH DAKOTA 0.4

10 TENNESSEE 1.9 24 WISCONSIN 1.3 44 CONNECTICUT 0.3

11 COLORADO 1.8 28 NEW MEXICO 1.2 45 MISSISSIPPI 0.1

11 NEW HAMPSHIRE 1.8 28 NORTH CAROLINA 1.2 46 LOUISIANA -0.111 SOUTH DAKOTA 1.8 30 NEBRASKA 1.1 47 KANSAS -0.214 MARYLAND 1.7 30 VIRGINIA 1.1 47 OKLAHOMA -0.214 MASSACHUSETTS 1.7 32 INDIANA 1.0 49 WEST VIRGINIA -0.414 MICHIGAN 1.7 32 NEW YORK 1.0 50 WYOMING -1.414 MINNESOTA 1.7 32 RHODE ISLAND 1.0 51 ALASKA -2.1

U.S. Year-over-year Percent Change: +1.6%

Rank MSA % Rank MSA %

1 Orlando-Kissimmee-Sanford, FL MSA 3.6 13Boston-Cambridge-Nashua, MA-NH Metro NECTA

1.6

2 Atlanta-Sandy Springs-Roswell, GA MSA 3.3 13 Portland-Vancouver-Hillsboro, OR-WA MSA 1.6

3Riverside-San Bernardino-Ontario, CA MSA

3.1 15Minneapolis-St. Paul-Bloomington, MN-WI MSA

1.5

4 Dallas-Fort Worth-Arlington, TX MSA 3.0 15Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA

1.5

5 Seattle-Tacoma-Bellevue, WA MSA 2.7 17Houston-The Woodlands-Sugar Land, TX MSA

1.4

6 Tampa-St. Petersburg-Clearwater, FL MSA 2.6 18 San Diego-Carlsbad, CA MSA 1.3

7 Phoenix-Mesa-Scottsdale, AZ MSA 2.5 19Washington-Arlington-Alexandria, DC-VA-MD-WV MSA

1.2

8 Charlotte-Concord-Gastonia, NC-SC MSA 2.4 20 Los Angeles-Long Beach-Anaheim, CA MSA 0.9

9Miami-Fort Lauderdale-West Palm Beach, FL MSA

2.3 20New York-Newark-Jersey City, NY-NJ-PA MSA

0.9

10 Denver-Aurora-Lakewood, CO MSA 2.1 22 Baltimore-Columbia-Towson, MD MSA 0.8

11 San Francisco-Oakland-Hayward, CA MSA 2.0 23 St. Louis, MO-IL MSA 0.4

12 Detroit-Warren-Dearborn, MI MSA 1.9 24 Chicago-Naperville-Elgin, IL-IN-WI MSA 0.3

Employment Growth, 24 Largest Metros (NSA)April 2016 v. April 2017 Percent Change

Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES) Survey

Rank MSA UR Rank MSA UR

1 Denver-Aurora-Lakewood, CO MSA 2.4 13 Los Angeles-Long Beach-Anaheim, CA MSA 4.2

2Boston-Cambridge-Nashua, MA-NH Metro NECTA

3.4 13 San Diego-Carlsbad, CA MSA 4.2

3 San Francisco-Oakland-Hayward, CA MSA 3.5 15 Dallas-Fort Worth-Arlington, TX MSA 4.3

4Washington-Arlington-Alexandria, DC-VA-MD-WV MSA

3.7 16 Charlotte-Concord-Gastonia, NC-SC MSA 4.4

4 Seattle-Tacoma-Bellevue, WA MSA 3.7 17 Baltimore-Columbia-Towson, MD MSA 4.5

6Minneapolis-St. Paul-Bloomington, MN-WI MSA

3.8 17 Chicago-Naperville-Elgin, IL-IN-WI MSA 4.5

7 Orlando-Kissimmee-Sanford, FL MSA 3.9 19 Atlanta-Sandy Springs-Roswell, GA MSA 4.6

7 Portland-Vancouver-Hillsboro, OR-WA MSA 3.9 19Miami-Fort Lauderdale-West Palm Beach, FL MSA

4.6

9 St. Louis, MO-IL MSA (1) 4.0 19Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA

4.6

10New York-Newark-Jersey City, NY-NJ-PA MSA

4.1 22 Detroit-Warren-Dearborn, MI MSA 5.1

10 Phoenix-Mesa-Scottsdale, AZ MSA 4.1 23 Riverside-San Bernardino-Ontario, CA MSA 5.3

10 Tampa-St. Petersburg-Clearwater, FL MSA 4.1 24Houston-The Woodlands-Sugar Land, TX MSA

5.7

Unemployment Rates, 24 Largest Metros (NSA)March 2017


U.S. Unemployment RateMarch: 4.5% April: 4.4%

1. Area boundaries do not reflect official OMB definitions.

21 Jump Street

(And Other Addresses of Interest)

Photo: TheMoveDatabase.org

National Nonresidential Construction Spending by

Subsector, March 2016 v. March 2017

Source: U.S. Census Bureau

-22.3%-13.9%

-12.3%-9.7%

-7.3%-4.2%

-2.4%-1.4%

1.0%2.5%

4.9%8.3%

9.2%10.9%

15.7%18.5%

-30% -20% -10% 0% 10% 20%

Sewage and waste disposalWater supply

TransportationManufacturing

ReligiousConservation and development

Highway and streetHealth careEducational

Public safetyPower

LodgingAmusement and recreation

CommercialOffice

Communication

12-month % Change

Total Nonresidential Construction YOY:

+$7.36B; +1.0%

Commercial/Multifamily Offshore Investment

Sales Volumes Reach New Heights in 2015

$8.5

$19.0$21.3

$35.0

$45.0

$12.5

$3.9

$14.0

$19.6

$26.8$30.1 $30.9

$76.2

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Bil

lio

ns

of

$US

Source: Jones Lang LaSalle; Real Capital Analytics Note: Among transactions larger than $5.0 million

Foreign Investment Increases 146.6 Percent in 2015 to $76.2b

Top Markets for Foreign Office Investment, 2015

$172 $249 $347 $394 $515 $602 $709

$995 $1,184

$1,935 $2,323

$11,237

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000

HoustonSilicon Valley

Dallas/Fort WorthSan Francisco

Los AngelesAtlantaMiami

ChicagoSeattle Bellevue

BostonWashington, DC

New York

Millions of $US

Annual Foreign Office Investment Volume

Source: Jones Lang LaSalle; Real Capital Analytics

Foreign Office Investment Activity, as of 2016Q3

Source: Jones Lang LaSalle; Real Capital Analytics

14.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

200

320

04

200

520

06

200

720

08

200

920

1020

1120

1220

1320

1420

1520

16Y

TD

Foreign Participation as a % of Total Office Volume

1.1%

1.1%

1.4%

1.6%

1.9%

2.1%

2.8%

4.8%

4.8%

5.6%

6.8%

7.1%

8.4%

45.5%

0% 10% 20% 30% 40% 50%

San Diego

Philadelphia

Austin

Atlanta

Chicago

Northern New Jersey

Miami

Seattle-Bellevue

Los Angeles

Dallas-Fort Worth

Washington, DC

Boston

San Francisco

New York

Foreign Office Investment by Destination Market (as a % of Total, 2016YTD)

Note: Among transactions larger than $5.0 million; includes all office markets which received > 1.0% of offshore capital.

Primary markets continue to capture the lion’s share of inbound capital, receiving 78.2% of this capital YTD.

U.S. Mergers and Acquisitions, 2016

Average Value of M&A Announced in 2016: $106 million

Smaller than 2015 average: $115.4 million

Larger than the 2000-2014 average: $77.1 million

5 Biggest Deals in 2016

1. AT&T and Time Warner: $85.4 billion

2. Bayer and Monsanto: $66 billion

3. British American Tobacco and Reynolds American: $58 billion

4. Sunoco Logistics and Energy Transfer Partners: $52 billion

5. Qualcomm and NXP Semiconductors: $47 billionSource: Fortune.com

Mergers and Acquisitions, 2017

In the first quarter of 2017:

Total # of deals: -17.9%

Overall deal value: +8.9% (to $678.5B)

Average deal value: $403.4 million

Clampdown on outgoing capital by the Chinese government decreased the number of Chinese buyers

Value of Chinese deals down 86 percent compared to last year

“The erosion in barriers to entry and the slowdown in emerging markets is forcing struggling multinationals into finding new avenue of growth … M&A is actually the quickest route – sometimes easier than innovation and less risky than extreme cost cutting.” – Cedric Besnard, Consumer Equity Analyst at Citi

“High liquidity, access to cheap financing, healthy balance sheets and a need to demonstrate growth to shareholders via M&A all provide a positive outlook for 2017. Technology will drive M&A activity, with disruptive industries such as artificial intelligence, fintech and the internet of thing continuing to attract investor attention.” –Katharine Dennys, EMEA Research Editor, Mergermarket

Source: CNBC.com

Down to “The Wire”

Photo: RecapGuide.com

Sales Growth by Type of Business April 2016 v. April 2017*

Source: U.S. Census Bureau

-2.4%

-0.7%

0.5%

0.7%

0.7%

1.8%

2.3%

3.8%

3.9%

4.4%

9.3%

11.9%

12.3%

-5% 0% 5% 10% 15%

Sporting Goods, Hobby, Book & Music Stores

General Merchandise Stores

Clothing & Clothing Accessories Stores

Electronics & Appliance Stores

Health & Personal Care Stores

Miscellaneous Store Retailers

Food & Beverage Stores

Furniture & Home Furn. Stores

Food Services & Drinking Places

Motor Vehicle & Parts Dealers

Building Material & Garden Supplies Dealers

Internet, etc. Retailers

Gasoline Stations

12-month % change

*April 2017 advanced estimate

Total Retail Sales: +4.5% YOY

U.S. Saving Rate, March 2005 – March 2017 (Savings as Percentage of Personal Disposable Income)


0.0

2.0

4.0

6.0

8.0

10.0

12.0

Mar

-05

Jul-

05

No

v-0

5M

ar-0

6Ju

l-0

6N

ov-

06

Mar

-07

Jul-

07

No

v-0

7M

ar-0

8Ju

l-0

8N

ov-

08

Mar

-09

Jul-

09

No

v-0

9M

ar-1

0Ju

l-10

No

v-10

Mar

-11

Jul-

11N

ov-

11M

ar-1

2Ju

l-12

No

v-12

Mar

-13

Jul-

13N

ov-

13M

ar-1

4Ju

l-14

No

v-14

Mar

-15

Jul-

15N

ov-

15M

ar-1

6Ju

l-16

No

v-16

Mar

-17

Sa

vin

gs

Ra

te (

%)

March 2017:5.9%

U.S. Gross Private Domestic Investment (SAAR)% Change from Previous Quarter, 2000Q1 – 2017Q1*


-40.0

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

200

0Q

120

00

Q3

200

1Q1

200

1Q3

200

2Q1

200

2Q3

200

3Q1

200

3Q3

200

4Q

120

04

Q3

200

5Q1

200

5Q3

200

6Q

120

06

Q3

200

7Q1

200

7Q3

200

8Q

120

08

Q3

200

9Q

120

09

Q3

2010

Q1

2010

Q3

2011

Q1

2011

Q3

2012

Q1

2012

Q3

2013

Q1

2013

Q3

2014

Q1

2014

Q3

2015

Q1

2015

Q3

2016

Q1

2016

Q3

2017

Q1

2017Q1:+4.3%


Conference Board Leading Economic Indicators IndexAugust 2007 through April 2017

Source: Conference Board

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%A

ug

-07

Dec

-07

Ap

r-0

8

Au

g-0

8

Dec

-08

Ap

r-0

9

Au

g-0

9

Dec

-09

Ap

r-10

Au

g-1

0

Dec

-10

Ap

r-11

Au

g-1

1

Dec

-11

Ap

r-12

Au

g-1

2

Dec

-12

Ap

r-13

Au

g-1

3

Dec

-13

Ap

r-14

Au

g-1

4

Dec

-14

Ap

r-15

Au

g-1

5

Dec

-15

Ap

r-16

Au

g-1

6

Dec

-16

Ap

r-17

On

e-m

on

th P

erc

en

t C

ha

ng

e

April 2017: 126.9 where 2010: 100

The Closer• Global economy remains weak,

and correspondingly . . . ;

• Global money has continued to pour into America in search of yield and safety, including into commercial real estate – that was particularly true in 2015, a bit less true in 2016 – M&A activity also stimulated;

• Inflationary pressures are on the rise – so, too, are interest rates –that could begin to squeeze asset prices in 2017, particularly if expected tax cuts are not passed into law;

• There are indications of mini-bubbles forming in commercial real estate, particularly in office, lodging and multifamily segments;

• There are also longer-term structural considerations, including the national debt and pending insolvencies of Medicare and Social Security – the longer-term outlook may be deteriorating even as the short-run improves;

• Momentum should see us through 2017, but tighter monetary policy combined with a heavy dose of political intrigue could render 2018 far different. By this time in 2019, the economy could be in a far different place and likely will be.

*Kyra Sedgwick as Brenda Leigh Johnson

Photo: Google

Thank You Follow us on Twitter @SagePolicyGroup

You can always reach me at [email protected]

Please look for updates of information at www.sagepolicy.com.

Also, if you need us in a hurry, we are at 410.522.7243 (410.522.SAGE)

Please contact us when you require economic research & policy analysis.

mailto:[email protected]

http://www.sagepolicy.com/

Documents

Markets, He Wrote - ACG