1

The Market Strategy Radar Screen May 30, 2017

John Stoltzfus Chief Investment Strategist Oppenheimer Asset Management

Key Takeaways

Investors likely to focus on jobs added in May, wage growth and unemployment rate this week when key employment data are released on Friday

Last week’s gains to new record highs in the S&P 500 and the Nasdaq could lead to a pause to ponder this week as the market seeks a catalyst.

Bitcoin surged 92% from April 25th

to May 25th

, when it reached an all-time high. We caution investors not to get caught up in the hype.

As investors return to their posts after the holiday weekend they will likely be focused on the last few names of the S&P 500 reporting results as well as the economic data crossing the transom leading up to the non-farm payroll number to be released on Friday. With a Bloomberg survey of economists pointing to expectations of 185,000 jobs added in May (vs. 211,000 in April) and expectations of a headline unemployment rate steady at 4.4%, we’d think that only a wide divergence from the anticipated number (either up or down) would cause any significant degree of drama.

Considering last week’s broad gains in the equity markets we would not be surprised to see a pause in the market’s upward progression to allow some time to digest the latest record highs in the S&P 500 and the Nasdaq composite as well as allow investors to ponder their next move.

Based on the market’s performance on May 17th

when stocks moved down nearly 2% in one day (causing quite a ruckus amongst those with lapsed memories of markets past) only to bounce to new record highs in the next few days—we’d think the market could now seek out a catalyst to justify some profit taking ahead of the start of Q2 earnings season, which lies just a few weeks away.

Where might a catalyst come from to justify some profit taking or sector rotation is the question. With the US economy growing at an annualized pace of around 2 to 2.5% (see comments on the upwardly revised Q1 GDP number on page 5) and Q1 earnings as of last week up just under 15% on the back of nearly 8% revenue growth (see our earnings scorecard on page 4 of this report for details) there’s a perception at least among some investors that there’s a lot of good news already priced into the market. With economic fundamentals improving (albeit at a somewhat anemic pace stateside), the Fed’s normalization process is likely to remain at a moderate and measured pace and with signs of economic recovery becoming more apparent of late, any profit taking will likely be short term and best left to short-term traders.

Global diversification remains a core element of our allocation decisions, driven by the US expansion, a data-dependent Fed, and improving economies abroad.

Stand Back and Move Away Slowly Spike in Bitcoin price and a surge in inquiries signal caution

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With growth stocks leading the market higher since the start of the year and with value stocks lagging we’d expect a possible rotation into value as the calendar page turns into the new month and the summer months come onto the horizon. Baby Boomers who have eschewed the traditional role of dividend paying stocks for the rush of chasing “growthier” issues could discover the functionality of dividend paying stocks that have the potential to offer dividend income and the potential for capital gains.

While some investors have been knocking stateside stock market valuations the recent declines in the dollar could likely help drive revenues and earnings higher for US multinationals in the quarters ahead.

From our perch on the radar screen global diversification remains a core element of our allocation decisions particularly within equities, driven by the U.S. expansion, a data-dependent Fed, and improving economies abroad.

Bitcoin Looking Bubbly

One area of concern on our radar screen has been the recent jump in the price of Bitcoin and the number of inquiries we have received for our opinion regarding its sizeable run up.

In the past week alone we have been asked about Bitcoin by investors and market observers as diverse as relatives, casual and longtime friends, financial professionals and most telling from one of our favorite New York City doormen.

Our take on Bitcoin has from the start been that the mechanism or the algorithms that generate the Bitcoin encryption process are what look to be something of value and interest for payment platform providers. However, to the best of our knowledge, the process has no patent holder. In fact the creator of Bitcoin is only rumored to be known.

Bitcoin Value in US Dollars

Source: Bloomberg, OAM Research. Data are weekly.

As to “the coin” itself and its “value?” We smell too much speculation, animal spirits, and irrational exuberance around the parabolic move it has experienced.

As strategists who deal with a hefty array of asset classes, the process of “mining” a Bitcoin as we understand it appears to be a digitally virtual “adventure.” We believe that currencies backed by governments offer levels of accountability and transparency that appear to be lacking in Bitcoin.

At the end of the day it is not even gold that stands behind the value of traditional currencies but rather the economic substance, transparency and accountability of the country that stands behind it.

For now we’ll recall the lyrics of the late great Gregg Allman whose southern classic “Stand Back” from the “Eat a Peach” album suggested, “stand back and move away slowly.”

Stay tuned.

About the Author John Stoltzfus is the chief investment strategist and a managing director with Oppenheimer Asset Management. He also conducts asset allocation work for the Market Strategy Portfolio. He joined Oppenheimer in 2012 and has more than 30 years of financial services experience. He holds a B.A. from Colgate University and is a frequent guest of and widely quoted by the press, including CNBC, Bloomberg, The Wall Street Journal, the Financial Times, The New York Times and USA Today.

$0

$500

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$1,500

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$2,500

US

Dolla

rs/

Bitoin

Stocks 68%

Alternative 5%

Real Estate 5%

Cash & Cash Equivalents

2%

Bonds 20%

Market Strategy Portfolio Asset Allocation

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Market Indicators in 2017 to Date

Trade-Weighted US Dollar Index (DXY)

Source: Bloomberg LP, and OAM Research.

Spot Price of Gold

Source: Bloomberg LP and OAM Research.

Crude Oil Prices (West Texas Intermediate)

Source: Bloomberg LP and OAM Research.

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The trade-weighted dollar index (versus six developed nation currencies), has fallen about 4.6% from its level at the end of 2016.

Downward pressure on the dollar in our opinion positions US multinationals more competitively in the international realm, which is experiencing a period of economic recovery. This could augur well for revenue and earnings growth in future quarters.

Some of the dollar’s recent weakness could be attributable to foreign investors’ concern that the Federal Reserve may take longer with its process of normalizing interest rates thus keeping interest rates lower for longer. At least some of the dollar’s recent strength had come from anticipation of higher rates stateside which had resulted in increased demand for US yield-producing investments.

The spot price of an ounce of gold has risen 10.4% in the year to date through May 26, 2017.

As the dollar’s strength has waned, gold has exhibited its historical tendency to be negatively correlated to the dollar. Should the Federal Reserve appear likely to raise rates at a faster clip, gold’s luster could lose its recent shine.

Gold has also likely gotten a lift from heightened geopolitical risk as a result of recent missile tests by North Korea.

Oil prices have slid lower in 2017. From $53.72 on December 30, 2016 prices have dipped as low as 45.52 on May 4, and closed on May 26 at $49.80, a decline of 7.3% year to date.

Last week’s decision by OPEC to extend its production policy to support the price of oil was not well received by commodities traders who were looking for deeper production cuts rather than maintaining the current policy of production restraints.

For now the increases stateside in rig production that have taken rig count up 122% (up by a factor of 2.2x) over the past 12 months are weighing somewhat heavily on oil prices and even more on oil stocks, with the S&P 500 oil sector off over 12% YTD.

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1Q2017 Earnings ScorecardExhibit 1

Source: Oppenheimer Asset Management Research and Bloomberg LP.

Exhibit 2

Source: Oppenheimer Asset Management Research and Bloomberg LP.

Earnings Scorecard

Source: Oppenheimer Asset Management Research and Bloomberg LP

-50%

0%

50%

100%

150%

Earnings Growth Y/Y

1Q17 4Q16

+600%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Sales Growth Y/Y

1Q17 4Q16

Reported Total % Reported Positive Negative Positive Negative

All Securities 487 500 97% 379 104 349 128

Energy 34 34 100% 31 3 25 9

Materials 25 25 100% 17 8 15 10

Industrials 67 67 100% 53 13 42 23

Consumer Discret. 77 80 96% 60 17 52 23

Consumer Staples 33 36 92% 19 13 24 8

Health Care 58 60 97% 45 13 46 12

Financials 65 65 100% 55 9 54 10

Information Tech. 65 68 96% 54 10 52 12

Telecoms 4 4 100% 0 4 1 2

Utilities 28 28 100% 22 6 18 9

Real Estate 31 31 100% 23 8 20 10

Sales Growth Earnings Growth

With nearly 98% of the companies in the S&P 500 index

having reported 1Q earnings, Bloomberg data shows

corporate earnings rising 14.8% overall on 7.9% growth in

revenues.

Energy sector earnings thus far in the quarter are

rebounding sharply from a year earlier. With all 34 firms

in the sector having reported, their earnings have soared

(up over 600% from extremely low levels a year ago) on a

33.0% rise in revenues.

Excluding the Energy sector, the other 453 (of 464)

companies in the S&P 500 have reported earnings growth

of 10.6% on a revenue gain of 6.0%.

Earnings growth has been particularly strong in three

other sectors in 1Q to date: Information Technology

(+21.9% on revenue gains of 9.4%), Materials (+19.4% on

9.1% revenue growth), and Financials (+18.4% on top-line

growth of 9.9%).

Telecoms is the only sector to show an earnings decline

(-4.6% on a similar-size slide in revenues) due to strong

price competition among the four firms in the sector (all

have reported).

With 97.8% of firms in the S&P 500 having reported, 78%

have posted positive earnings surprises.

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Economic Indicators of Interest

GDP Growth in Q1

Source: Bureau of Economic Analysis, Bloomberg LP, and OAM Research.

University of Michigan Consumer Sentiment Index

Source: University of Michigan, Bloomberg LP, and OAM Research.

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

2014 2015 2016 2017

QoQ Growth, annualized

YoY Growth

40

60

80

100

GDP growth was revised upward to a 1.2% annualized pace for the March quarter, up from 0.7% previously estimated. The revision comes as the pace of consumption spending was revised upward, a doubling to 0.6% growth from 0.3% previously estimated. Business fixed investment was also revised upward and reflects the revival of the energy sector, where higher oil prices have spurred domestic oil companies to sink additional wells. Corporate profits were a disappointment in the report, declining 1.9% in the quarter, but in the face of several financial settlements.

Overall, while the Q1 GDP data are stronger than previously estimated, the nation recorded only sluggish economic growth. Despite evidence that the economy is nearing full employment, growth continued to remain sluggish in Q1 and early indicators for Q2 haven’t been encouraging for any appreciable acceleration in activity.

The University of Michigan’s consumer sentiment index remained flat in May but at relatively high levels. The Michigan index has lagged the Conference Board’s survey of consumer confidence in recent months, but these relatively high readings suggest that sentiment is not the issue that’s leading to sluggish consumption spending (see GDP report above).

With the labor market tightening in recent months (sending the unemployment rate below 5%), we suspect that higher wage growth is the key to unlocking stronger spending and economic activity.

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Equity Market Volatility

Volatility (VIX) Index: Past 30 Days

Source: Chicago Board Options Exchange, Bloomberg LP, OAM Research.

Volatility (VIX) Index: Last 12 Months

Source: Chicago Board Options Exchange, Bloomberg LP, OAM Research.

Volatility (VIX) Index: Last Ten Years

Source: Chicago Board Options Exchange, Bloomberg, LP, OAM Research.

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VIX Index

1-Year Average

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60

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80

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VIX Index

10-Year Average

The VIX index, which tracks equity market volatility,

receded below 10 in the face of a late-week rally. It closed

the week on Friday at 9.81, down about 18% from the

prior week’s close. Friday’s close is about 26% below its

one-year average of 13.28 (see second figure).

We expect volatility to remain a potentially recurrent

factor as the market weighs from week to week the Fed’s

progress in its efforts to normalize interest rates against

economic growth, currency and commodity prices.

In a highly transitional environment, with interest rates,

currencies and commodity prices in flux, periods of

volatility are to be expected.

Stateside and international developments (economic,

geopolitical, and even sector—and company-specific) are

expected to continue to serve as potential catalysts for

jumps in volatility.

Further adjustments to currency and the effects of

domestic stimulus policy in China, along with

developments tied to Brexit, as well as current geopolitical

situations in North Korea, Afghanistan, and Syria also have

the capability to generate volatility near term.

An additional source of volatility for the market could

come from the presidential transition and agenda issues

from both sides of the political aisle.

At its recent historically low levels, we consider the VIX to

be prone to spring higher should a catalyst emerge.

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The S&P 500 and Sector Performance

S&P 500 GICS Sector Returns: May 19th to 26th, 2017

Source: Oppenheimer Asset Management Research and Bloomberg LP. Note: Results cannot and should not be

viewed as an indicator of future performance. Return calculations exclude applicable costs. Defensive sectors, which

are less sensitive to economic growth cycles, include Consumer Staples, Utilities, Health Care and Telecoms.

S&P 500 GICS Sector Returns: Year to Date

Source: Oppenheimer Asset Management Research and Bloomberg LP. Note: Results cannot and should not be

viewed as an indicator of future performance. Return calculations exclude applicable costs.

-2.1%

-0.3%

0.7%

1.0%

1.1%

1.3%

1.4%

1.7%

1.7%

2.2%

2.3%

2.5%

-3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0%

Energy

Telecom

Real Estate

Materials

Health Care

Financials

S&P 500 Index

Industrials

Consumer Discretionary

Consumer Staples

Information Technology

Utilities

-12.1%

-11.7%

1.3%

3.6%

6.2%

7.0%

7.9%

9.1%

9.2%

9.8%

11.4%

19.7%

-15% -10% -5% 0% 5% 10% 15% 20%

Energy

Telecom

Financials

Real Estate

Materials

Industrials

S&P 500 Index

Consumer Staples

Utilities

Health Care

Consumer Discretionary

Information Technology

The broad market gained 1.4% over the week

as nine of the 11 sectors saw gains.

The cyclical sectors rose 0.9% on average over

the week despite a 2.1% decline in Energy

sector stocks.

Defensive sector stocks outperformed, rising

1.4%, with three of four sectors rising.

The broad market has risen by 7.9% in the year

to date through May 19th

.

The seven cyclical sectors have advanced on

average 5.3%, with the strongest gains recorded

by the Technology sector. Energy stocks

reflecting oil price volatility have served as a

drag on the performance of the cyclical sectors

so far this year.

The four defensive sectors have

underperformed the cyclicals so far in 2017

through last Friday, rising 4.1% on average.

Telecoms have served as a drag to the overall

performance of the defensive sectors year-to-

date.

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US and Other Developed and Emerging Markets

Domestic and International Index Performance: May 19th to 26th, 2017

Source: Oppenheimer Asset Management Research and Bloomberg LP. Note: Results cannot and should

not be viewed as an indicator of future performance. Return calculations exclude applicable costs.

Domestic and International Index Performance: Year to Date

Source: Oppenheimer Asset Management Research and Bloomberg LP. Note: Results cannot and should

not be viewed as an indicator of future performance. Return calculations exclude applicable costs.

1.4%

0.9%1.1%

2.1%

0.6%

0.1%

2.1%

1.3%

-1%

0%

1%

2%

3%

S&P 500 S&P 400Midcap

Russell 2000 NASDAQComposite

Index

MSCI AllCountry

Except US

MSCI EAFEDeveloped

Markets

MSCIEmerging

Markets

MSCIFrontier

Markets

7.9%

4.0%

1.9%

15.4%

12.5% 12.0%

17.9%

12.5%

-5%

0%

5%

10%

15%

20%

S&P 500 S&P 400Midcap

Russell 2000 NASDAQComposite

Index

MSCI AllCountry

Except US

MSCI EAFEDeveloped

Markets

MSCIEmerging

Markets

MSCIFrontier

Markets

US large cap stocks outperformed the mid-and

small caps last week. However, the technology-

heavy Nasdaq composite was the top

performing domestic index of those we

highlight here.

Foreign developed markets, as represented by

the MSCI EAFE index, rose just 0.1%.

The MSCI Emerging Markets index gained 2.1%,

while the Frontier Market index rose 1.3%.

Since the start of the year, the US large cap

index (S&P 500) has outperformed the mid

and small cap indexes.

International markets have fared broadly

better, with the EAFE (developed markets

ex-US and Canada), the MSCI Emerging

Markets index and the MSCI Frontier

markets outperforming many of the US

bellwether indexes.

The divergence in performance between

US and international markets appears to us

to reflect global investors’ increasing

interest in the economic recoveries taking

place in the international realm as well as

attractive relative valuations and

opportunities.

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The MSRS Global Asset Allocation

Source: Oppenheimer Asset Management Research.

Equities

US: For 2017, we look for the S&P 500 to generate earnings of around $125 per share, on which we place a P/E multiple

of 19.5x to arrive at a price target of $2450 for the benchmark in 2017. We based our target on our expectations for a

combination of earnings growth and multiple expansion as interest rates normalize moderately and as investors pay

more for each dollar of earnings growth. We believe that US equities can remain in bull market mode as

fundamentals tied to the domestic economy continue to improve. We reiterate an overweight exposure to US equities

and expect sustainable growth stateside to lead regions outside the US in recovery even as currency devaluations

and geopolitical tensions remain risks.

EAFE: As an improving economic outlook in Europe re-emerges along with some progress in Japan via “Abe economics,”

we expect developed markets outside the US to regain popularity among investors. Lower forward valuations in

Europe and Japan offer attractive potential upside as the global economy recovers, in our view.

EM/FM: We remain positive toward Emerging markets and Frontier markets as the global economic recovery moves ahead.

We believes improvements in emerging economies coupled with secular consumer trends warrant a weight equal to

developed market counterparts.

Fixed Income

US: We recommend that investors keep durations “in” (short- to mid-term) as interest rate normalization is under way

though at a modest pace. Normalization is a process of price discovery by the markets in conjunction with monetary

policy; it tends not to move in a straight line as much as it ratchets its way higher.

EAFE: With ECB QE a little more than a year under way, European bonds are traveling along their own path of price

discovery and are currently affected by a number of negative interest rate situations, increasing the likelihood of

volatility at some point in the future when Europe is able to normalize.

EM/FM: Emerging market interest rates have recently regained the attention of global investors hungry for yield. We remain

underweight Emerging Market debt as a result. We also currently avoid exposure to Frontier market debt, as to us,

the capture of higher yields is not commensurate with the added risk (higher volatility).

Stocks, 68%

Bonds, 20%

Global Commodities, 0%

Alternatives, 5%Real

Estate, 5%

Cash & Cash Equivalents, 2%

Asset Class Total

Percent

of

Portfolio

S&P 500 33%

S&P 400 33%

S&P 600 33%

EAFE 55% 13%

EM 38% 9%

Frontier 9% 2%

Intermed. Munis 45% 9%

U.S. Convertibles 30% 6%

IG Floating Rate Notes 10% 2%

Senior Loans 15% 3%

Commodities 0% 0%

Alternatives 5% Global 100% Timber 100% 5%

Real Estate 5% Global 100% REITs 100% 5%

Cash 2%2%

Regional Market

Bonds 20% US 100%

Stocks 68%

US 65%

Asset by

Region

Int'l 35%

44%

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Global Commodities

Although demand for commodities should improve as global growth recovers, improvements in extraction technology and ample supplies continue to broadly weigh on prices and have indeed caused prices of many commodities to drop precipitously. We prefer and would continue to gain exposure to commodities via “proxy” with equities in the Materials

sector. Alternative Investments

Alternative investments come in a wide variety of offerings that include timber, farmland, derivatives, structured

products, venture capital, private equity and hedge funds. The degree to which they are deployed depends on an

investor’s or entity’s needs, objectives and tolerances. The amount assigned to alternatives can be increased by

reducing exposure to another asset class. Often alternatives can serve as proxies for another asset class depending

on structure and/or correlation.

Real Estate

For US investors, we’d maintain selective US and international exposure to real estate. Those with significant

exposure via direct purchases (e.g., second homes, rental properties) could forgo REITs in favor of additional

exposure to equity sectors.

Cash

We recommend investors maintain a small allocation to cash (“dry powder”) for opportunistic buying on dips and for

rebalancing.

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Positions on the Radar Screen

US Treasuries Yields 5/26/2017 5/19/2017 BPs Chg BPs Chg YTD

US 2-Year 1.30% 1.27% 2 bps 25 bps

US 5-Year 1.79% 1.78% 1 bps 3 bps

US 10-Year 2.25% 2.24% 1 bps -2 bps

US 30-Year 2.91% 2.90% 1 bps -10 bps

Major Indices 5/26/2017 % Chg Wkly % Chg YTD

Dow Jones Industrial Average 21,080.28 1.32% 6.67%

NASDAQ Composite 6,210.19 2.08% 15.36%

Russell 2000 1,382.24 1.09% 1.85%

S&P 500 Large caps 2,415.82 1.43% 7.91%

S&P 400 Mid caps 1,727.27 0.89% 4.02%

S&P 600 Small caps 837.50 1.13% -0.05%

S&P 500 10-GICS Sectors

Consumer Discretionary 721.91 1.74% 11.44%

Consumer Staples 580.26 2.22% 9.12%

Energy 487.49 -2.14% -12.08%

Financials 391.38 1.25% 1.25%

Health Care 875.05 1.06% 9.81%

Information Technology 966.77 2.32% 19.66%

Industrials 575.69 1.68% 6.99%

Telecom Services 155.99 -0.27% -11.68%

Materials 331.59 0.97% 6.22%

Utilities 269.54 2.48% 9.20%

Source: Oppenheimer Asset Management Research, Bloomberg LP

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International Indices 5/26/2017 % Chg Wkly % Chg YTD

MSCI EAFE (Dev Nations ex. US & Canada) 1,885.37 0.14% 11.96%

MSCI Emerging Markets 1,017.00 2.14% 17.94%

MSCI Frontier Markets 561.57 1.32% 12.46%

Nikkei 225 19,682.57 0.49% 2.97%

Topix 1,570.21 0.62% 3.40%

HongKong 25,701.63 1.84% 16.82%

Shanghai 3,110.06 0.63% 0.21%

India 31,109.28 1.85% 16.84%

Korea 2,352.97 2.92% 16.11%

Singapore 3,214.55 0.08% 11.59%

Malaysia 1,764.89 0.23% 7.50%

Australia 5,707.07 0.42% 0.73%

Thailand 1,568.17 1.27% 1.64%

Eurostoxx 600 391.25 -0.04% 8.25%

Netherlands 527.73 0.21% 9.22%

Spain 10,884.00 0.63% 16.38%

Germany 12,628.95 -0.29% 10.00%

Sweden 1,631.92 0.40% 7.56%

Switzerland 9,031.96 0.22% 9.88%

United Kingdom 7,547.63 1.03% 5.67%

Turkey 97,725.95 2.51% 25.07%

Greece 777.19 -0.74% 20.75%

Commodities 5/26/2017 % Chg Wkly % Chg YTD

CRB Excess Return Index (CRY) 182.00 -1.66% -5.46%

S&P GSCI Index Spot Indx 385.50 -1.42% -3.19%

Gold $/Oz $1,268.14 0.88% 10.06%

Copper $257.00 -0.56% 2.57%

WTI Crude $49.99 -1.05% -6.94%

Brent Crude $52.29 -2.72% -7.97%

Heating Oil $157.03 -1.23% -7.86%

Natural Gas $3.21 -0.61% -13.75%

Currencies

Spot Dollar Index (DXY) 97.44 0.31% -4.64%

Euro Spot 1.1183 -0.21% 6.15%

Japanese Yen Spot 111.33 0.06% 5.11%

JPY-EUR X-RATE(x100) 0.80 0.15% 0.96%

British Pound Spot 1.2804 -1.78% 4.04%

Canadian Dollar Spot 1.3446 -0.48% -0.13%

Australian Dollar Spot 0.74 -0.15% 3.22%

Brazilian Real Spot 3.26 0.18% -0.05%

BALTIC DRY INDEX 912 -4.60% -5.10%

Swiss Franc Spot 0.9741 0.12% 4.22%

Source: Oppenheimer Asset Management Research, Bloomberg LP

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Important Disclosures and CertificationsThe published date of the recommendations contained in this report can be found by accessing disclosures (https://opco2.bluematrix.com/sellside/MAR.action).This report was produced at May 30, 2017 05:32 EDT and disseminated at May 30, 2017 05:32 EDT.

Analyst Certification - The author certifies that this investment strategy report accurately states his/her personal views aboutthe subject securities, which are reflected in the substance of this investment report. The author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in thisinvestment strategy report.

The strategy provided in this report is provided by Oppenheimer Asset Management Inc., (“OAM”) a registered investment adviser affiliateof Oppenheimer & Co. Inc. (“OPCO”). It reflects analysis of fundamental, macroeconomic and quantitative data to provide investmentanalysis with respect to U.S. securities markets. The overview in this report is provided for informational purposes and does not constitutean offer to sell, a solicitation to buy, or a recommendation for any security or investment advisory services. The report is not intended toprovide personal investment advice. The investments discussed in this report may not be suitable for all investors. Investors should usethe analysis provided by this report as one input into formulating an investment opinion and should consult with their Financial Advisor.Additional inputs should include, but are not limited to, the review of other research reports generated by OAM, its affiliates, and looking atalternate analyses of the underlying corporate issuer. Securities and other financial instruments discussed in this report or recommendedor sold by OPCO or OAM are not insured by the Federal Deposit Insurance Corporation and are not deposits or obligations of any insureddepository institution. Investments involve numerous risks including market risk, counterparty default risk and liquidity risk. Securities andother financial investments at times may be difficult to value or sell. The value of financial instruments may fluctuate, and investors maylose their entire principal investment.Analyst Certification - The author certifies that this research report accurately states his/her personal views about the subject securities,which are reflected in the substance of this report. The author certifies that no part of his/her compensation was, is, or will be directly orindirectly related to the specific recommendations or views contained in this research report.Potential Conflicts of Interest: Strategic analysts employed by OAM are compensated from revenues generated by the firm. OAMgenerally prohibits any analyst and any member of his or her household from executing trades in the securities of a company that suchanalyst covers. Additionally, OAM generally prohibits any analyst from serving as an officer, director or advisory board member of a companythat such analyst covers. In addition to 1% (or more) ownership positions in covered companies that are required to be specifically disclosedin this report, OPCO may have a long positon of less than 1% or a short position or deals as principal in the securities discussed herein,related securities or in options, futures or other derivative instruments based thereon and makes a market in the securities discussedherein. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forthbelow, may at times give rise to potential conflicts of interest.Third Party Research DisclosureOAM has a research sharing agreement with OPCO pursuant to which OPCO provides OAM research to its institutional and retailcustomers. OPCO does not guarantee that the information in OAM research reports is accurate, complete or timely, nor does OPCO makeany warranties with regard to the research product or the results obtained from its use. OPCO has no control over or input with respect toopinions found in OAM research. OAM is a registered investment adviser affiliate of OPCO.Additional InformationPlease write to Oppenheimer Asset Management Inc., 85 Broad Street, New York, NY 10004. Attention: Compliance Department. OtherDisclosures This report is issued and approved by OAM, a registered investment adviser, for use by its affiliates OPCO, OppenheimerEurope Ltd. and Oppenheimer Investments Asia Limited. This report may be further distributed by OPCO for informational purposes only, toits institutional and retail investor clients. OPCO transacts business on all principal Exchanges and is a member of SIPC. This report doesnot constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation wouldbe prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into accountthe investment objectives, financial situation or specific needs of any particular client of OAM or its affiliates. Recipients should consider thisreport as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein,if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The analyst writing the report isnot a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making aninvestment decision with respect to any security recommended in this report, the recipient should consider whether such recommendationis appropriate given the recipient's particular investment needs, objectives and financial circumstances. We recommend that investorsindependently evaluate particular investments and strategies, and encourage investors to seek the advice of a financial advisor. OAM willnot treat non-client recipients as its clients solely by virtue of their receiving this report. Past performance is not a guarantee of future results,and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. Theprice of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates,

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and investors may realize losses on investments in such securities, including the loss of investment principal. OAM accepts no liability forany loss arising from the use of information contained in this report. All information, opinions and statistical data contained in this report wereobtained or derived from public sources believed to be reliable, but OAM does not represent that any such information, opinion or statisticaldata is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by.OAM or individual research analysts), and they should not be relied upon as such. All estimates, opinions and recommendations expressedherein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal,accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation shouldnot be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications,clients should consult with their own independent tax adviser. This report may provide addresses of, or contain hyperlinks to, Internet websites. OAM has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each suchaddress or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third party web sites isnot in any way incorporated into this document. Recipients who choose to access such third-party web sites or follow such hyperlinksdo so at their own risk. The S&P 500 Index is an unmanaged value-weighted index of 500 common stocks that is generally consideredrepresentative of the U.S. stock market. The S&P 500 index figures do not reflect any fees, expenses or taxes. Indices are unmanaged,hypothetical portfolios of securities that are often used as a benchmark in evaluating the relative performance of a particular investment.An index should only be compared with a mandate that has a similar investment objective. An index is not available for direct investment,and does not reflect any of the costs associated with buying and selling individual securities or management fees. The Volatility Index(VIX) shows the market's expectations of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 indexoptions. The VIX is a widely used measure of market risk. This research report may also be distributed in the UK and elsewhere throughoutEurope, as third party research by Oppenheimer Europe Ltd, which is authorized and regulated by the Financial Conduct Authority (FCA).This research is for information purposes only and is not to be construed as a solicitation or an offer to purchase or sell investmentsor related financial instruments. This research is for distribution only to persons who are eligible counterparties or professional clients.It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. In particular, this material is not fordistribution to, and should not be relied upon by, retail clients, as defined under the rules of the FCA. Neither the FCA’s protection rulesnor compensation scheme may be applied. https://opco2.bluematrix.com/sellside/MAR.action This research report may be distributed inHong Kong by Oppenheimer Investments Asia Limited (OIAL) to professional investors, persons whose business involves the acquisition,disposal or holding of securities, whether as principal or agent. OIAL, an affiliate of Oppenheimer Asset Management Inc., is regulated bythe Securities and Futures Commission for the conduct of dealing in securities, advising on securities, and advising on corporate finance.Professional investors in Hong Kong should contact researchasia@opco.com for all matters and queries relating to this report.The above is for informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the investmentsmentioned herein. OAM does not warrant the accuracy, adequacy or completeness of the information and materials contained in thisdocument and expressly disclaims liability for errors or omissions in such information and materials. Some of the information in thisdocument may contain projections or other forward looking statements regarding future events or future financial performance of countries,markets or companies. These statements are only predictions and actual events or results may differ materially. The reader must make his/her own assessment of the relevance, accuracy and adequacy of the information contained in this document, and make such independentinvestigations, as he/she may consider necessary or appropriate for the purpose of such assessment. Any opinion or estimate containedin this document is made on a general basis and is not to be relied on by the reader as advice. Neither OAM nor any of its agents havegiven any consideration to nor have they made any investigation of the investment objectives, financial situation or particular need of thereader, any specific person or group of persons. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted forany loss arising whether directly or indirectly as a result of the reader, any person or group of persons acting on any information, opinion orestimate contained in this document. OAM reserves the right to make changes and corrections to its opinions expressed in this documentat any time, without notice. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent ofOPCO and/or OAM. Copyright © Oppenheimer & Co. Inc. 2017.

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