ECONOMIC OUTLOOK - IDOB · 19 A Picture of Global Economic Growth Source: Northern Trust Mar-16...
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ECONOMIC OUTLOOK M. Randolph Westlund , CFA Executive Vice President and Chief Investment Officer Quad City Bank and Trust Company
Transcript of ECONOMIC OUTLOOK - IDOB · 19 A Picture of Global Economic Growth Source: Northern Trust Mar-16...
ECONOMIC OUTLOOK
M. Randolph Westlund, CFAExecutive Vice President andChief Investment OfficerQuad City Bank and Trust Company
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Resilient Economy - No Sense of Urgency
M. Randolph Westlund, CFA
April 2017
Sources: ABA, Bloomberg, Federal Reserve, JP Morgan Asset Mgmt,
Kiplinger’s, Ned Davis Research, Northern Trust, QCRH, Reader’s Digest,
Standard and Poor’s, Young Invincibles
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Statistics Do Not Lie…
Source: QCR Anecdote File
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Consumer Sentiment – Looking Forward More Comfortably
Source: Bloomberg
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Business Sentiment – Still Expecting Better
Source: ABA
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When you hear the phrase
“slow growth”, do you
focus on “slow”, or
focus on “growth”?
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Source: ABA
U.S. Economy is Growing
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Economist Forecasts Anticipate Somewhat Better to Come
Source: JP Morgan Asset Mgmt, Bloomberg
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Source: Christian Century 11-3-09
Employment Needs?
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Employment Advances – Less Unemployed and More Earnings
Source: JP Morgan Asset Mgmt, Ned Davis Research
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Employment Advances – More Jobs Filled, More Jobs Open
Source: Ned Davis Research, JP Morgan Asset Mgmt
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Source: New York Fed, JP Morgan Asset Mgmt
Consumer Balance Sheets – Staying Solid
** JPM Estimate
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Source: New York Fed, JP Morgan Asset Mgmt
Consumer Balance Sheets – Staying Solid
** JPM Estimate
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Household Formation Coming Back?
Source: QCR Anecdote File
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Source: ABA, Northern Trust, JP Morgan Asset Mgmt
Housing – Some Supply Growth and Upward Price Moves
-20
-15
-10
-5
0
5
10
15
Apr-07 Apr-09 Apr-11 Apr-13 Apr-15
PRICES - YOY % GROWTH
Existing homes
S&P/Case-Shiller
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And Now, From Washington DC…
Source: Reader’s Digest June 2015
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Fiscal Forecast – Cloudy with a Chance of…
Source: JP Morgan Asset Mgmt
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Looking Into the Future of Global Growth…
Source: QCR Anecdote File
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A Picture of Global Economic Growth
Source: Northern Trust
Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 12Mo Trend
Manufacturing 50.7 50.2 50.1 50.4 51.0 50.7 51.0 51.9 52.0 52.7 52.7 53.0
Services 51.3 51.7 51.2 51.3 51.6 51.2 51.6 52.9 53.1 53.5 54.0 53.3
Manufacturing 50.9 50.5 50.3 51.2 51.4 51.2 51.5 52.6 52.9 53.7 54.2 54.1
Services 51.7 52.3 51.8 51.5 51.3 51.5 51.7 53.6 54.0 53.8 54.5 53.6
Manufacturing 51.7 50.7 51.0 52.8 52.3 49.4 51.7 52.0 53.5 54.5 56.0 57.7
Services 54.9 55.7 53.6 56.1 54.9 51.7 56.6 54.6 56.2 56.6 56.5 57.6
Manufacturing 51.6 51.7 51.5 52.8 52.0 51.7 52.6 53.5 53.7 54.9 55.2 55.4
Services 53.1 53.1 53.3 52.8 52.9 52.8 52.2 52.8 53.8 53.7 53.7 55.5
Manufacturing 51.2 49.7 50.7 52.5 48.2 53.5 55.2 54.6 53.5 56.0 55.4 54.5
Services 53.7 52.3 53.5 52.3 47.4 52.9 52.6 54.5 55.2 56.2 54.5 53.3
Manufacturing 49.1 48.2 47.7 48.1 49.3 49.5 50.4 51.4 51.3 52.4 52.7 53.3
Services 50.0 49.3 50.4 49.4 50.4 49.6 48.2 50.5 51.8 52.3 51.9 51.3
Manufacturing 51.5 52.2 52.1 51.8 51.9 51.1 50.3 51.1 51.5 51.8 53.5 54.7
Services n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Manufacturing 58.1 53.4 51.0 51.8 56.4 46.9 49.8 50.9 54.2 55.4 51.2 59.3
Services 49.5 49.7 51.5 51.3 53.9 45.0 48.9 50.5 51.1 57.7 54.5 49.0
Manufacturing 50.2 49.6 49.5 49.3 50.3 50.1 50.4 51.0 50.7 51.0 50.8 51.3
Services 50.1 49.9 49.1 50.5 51.5 51.2 51.0 51.0 50.9 51.5 52.1 52.0
Manufacturing 49.7 49.4 49.2 48.6 50.6 50.0 50.1 51.2 50.9 51.9 51.0 51.7
Services 52.2 51.8 51.2 52.7 51.7 52.1 52.0 52.4 53.1 53.4 53.1 52.6
GLOBAL PMI SURVEYS
Canada
Australia
Emerging
Markets
Developed
Markets
Global
United
States
Eurozone
United
Kingdom
Japan
China
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A Global Economy in Transition
Source: Kiplinger’s
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Developed Economies – Stressing the Next Gen?
Source: Northern Trust
Source: Northern Trust, United Nations Population Division. Data labels represent non-indexed population figures/estimates (millions). Dependency ratio defined as % of population older than 65 or younger than 15 divided by the remainder. Eurozone* excludes Portugal.
322
389
65
75
325 322 127
107
50
60
70
80
90
100
110
120
130
140
150
160
2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050
United States United Kingdom Eurozone* Japan
ESTIMATED CHANGES IN POPULATION (2015 = 100)
0
10
20
30
40
50
60
70
80
90
100
2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050
United States United Kingdom Eurozone Japan
FUTURE PROJECTIONS FOR DEPENDENCY RATIOS (%)
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Emerging Economies – Growing the Next Gen?
Source: Northern Trust
Source: Northern Trust, United Nations Population Division. Data labels represent non-indexed population figures/estimates (millions). Dependency ratio defined as % of population older than 65 or younger than 15 divided by the remainder.
208
238
143
128
1311
1705
1376 1348
50
60
70
80
90
100
110
120
130
140
150
160
2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050
Brazil Russia India China
ESTIMATED CHANGES IN POPULATION (2015 = 100)
0
10
20
30
40
50
60
70
80
90
100
2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050 2015 2020 2025 2050
Brazil Russia India China
FUTURE PROJECTIONS FOR DEPENDENCY RATIOS (%)
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Millennials in Focus – Planning for the Future
Source: Young Invincibles
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Investment Market Expectations…
Source: QCR Anecdote File
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Source: Bloomberg
The Long Downhill of Interest Rates
US Treasury Yields
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“To let be, or not to let be, that is the question:
Whether ‘tis Nobler in the mind to suffer
The Slings and Arrows of outrageous future losses
Or to take Arms against a sea of low yields,
And by opposing end them: to sell, to hold
No more; and by a sell, to say we end
The Heart-ache, and the thousand Natural shocks
Of price declines that the portfolio is heir to?
“Tis a consummation Devoutly to be wished.”
(With major apologies to Shakespeare!)
Interest Rates Offer Little Return (with Risk?)…
Source: QCR Anecdote File
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Source: Bloomberg
Time to Adjust Interest Rate Expectations?
US Treasury Yields
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Is This Rational?
Source: QCR Anecdote File
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Source: JPMorgan Asset Mgmt, Standard and Poor’s
Should Equity Markets Expect a Correction?
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Source: JPMorgan Asset Mgmt, Standard and Poor’s
Should Equity Markets Expect a Correction?
OPERATING AS REPORTED 12-MTH EARNINGS PER SHARE
EARNINGS EARNINGS OPERATING AS REPORTED
QUARTER -END PRICE PER SHR PER SHR EARNINGS EARNINGS (ests are (ests are (ests are (ests are
bottom up) bottom up bottom up) bottom up)
ESTIMATES
12/31/2018 $39.07 $33.46 $146.57 $130.03
9/30/2018 $37.69 $33.50 $142.58 $127.98
6/30/2018 $36.01 $32.56 $138.60 $125.73
3/31/2018 $33.80 $30.51 $134.36 $122.47
12/31/2017 $35.08 $31.41 $129.74 $118.83
9/30/2017 $33.71 $31.25 $122.56 $111.58
6/30/2017 $31.77 $29.30 $117.54 $105.72
3/31/2017 2362.72 $29.18 $26.87 $111.47 $99.70
12/31/2016 (98.2%) 2238.83 $27.90 $24.16 $106.26 $94.55
ACTUAL
09/30/2016 2168.27 $28.69 $25.39 $101.42 $89.09
06/30/2016 2098.86 $25.70 $23.28 $98.17 $86.92
03/31/2016 2059.74 $23.97 $21.72 $98.61 $86.44
12/31/2015 2043.94 $23.06 $18.70 $100.45 $86.53
09/30/2015 1920.03 $25.44 $23.22 $104.14 $90.66
06/30/2015 2063.11 $26.14 $22.80 $108.30 $94.91
03/31/2015 2067.89 $25.81 $21.81 $111.50 $99.25
12/31/2014 2058.90 $26.75 $22.83 $113.01 $102.31
09/30/2014 1972.29 $29.60 $27.47 $114.51 $105.96
06/30/2014 1960.23 $29.34 $27.14 $111.83 $103.12
03/31/2014 1872.34 $27.32 $24.87 $108.85 $100.85
12/31/2013 1848.36 $28.25 $26.48 $107.30 $100.20
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Source: JPMorgan Asset Mgmt
Thinking on Long-Term Trends…
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Source: JPMorgan Asset Mgmt
Thinking on Long-Term Trends…
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Disclosures
This presentation was prepared by Quad City Bank & Trust and is intended for your private use. This material reflects the current opinion of the Investment Group
based upon sources believed reliable but not guaranteed by it. Opinions expressed are subject to change without notice. This information does not constitute a
solicitation or an offer to buy or sell any security. is intended for your private use. This material reflects the current opinion of the Investment Group based upon sources
believed reliable but not guaranteed by it. Opinions expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell
any security.
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