Domestic Perspectives, Trade, and Outlook on United States–Mexico–Canada Agreement

Danielle DiMartino Booth CEO & Chief Strategist for Quill Intelligence LLC

Deteriorating US Micro Fundamentals

Will The Real Junk Bonds Please Raise Their Hands?

The True $2.5 Trillion Investment Grade Bond Market Dwarfed by $5 Trillion in High Risk Debt

Earnings Per Share Growth with and Without Share Buybacks Earnings Per Share Earnings per Share w/0 Share-Buy Backs

130

EPS Growth% (left)

9%

EPS Growth% w/o Share-BuyBacks (right)

120 110

7%

100

5%

90

3%

80

1%

70 -1%

60

-3%

50

-5%

Source: Artemis

Sept 17

Mar 17

Sept 16

Mar 16

Sept 15

Mar 15

Sept 14

Mar 14

Sept 13

Mar 13

Sept 12

Mar 12

Sept 11

Mar 11

Sept 10

Mar 10

Sept 09

Mar 09

40

Air Comes out of Global Reflation Trade

Should Investors Listen to Stocks or Bonds?

This is Not a Drill

There But For the Grace of Lag Go Central Bankers

Party Like It’s 1969

Least Creditworthy Most At Risk

Diminishing Returns Latest Evidence of Diminishing Returns: GDP Generating Capacity of Global Debt: All Major Economies (2007-2009 avg.) (2017-Q1 2019 avg.) Percent Ratio of GDP Ratio of GDP Change to Debt to Debt

A

B

C

1

Euro Area

0.44

0.38

-13.5%

2

U.K.

0.42

0.36

-14.3%

3

Japan

0.32

0.27

-14.8%

4

U.S.

0.43

0.40

-5.6%

5

China

0.65

0.34*

-38.2%*

6

All Reporting Countries (aggregate)

0.47

0.42

-11.1%

Source: Hoisington Asset Management, Bank ofSInternational Institute o u r c e : H o Settlements. i s i n g t o n *A China s s e t adjusted M a n a gbased e m eupon n t , B“Aa nforensic k o f I examination n t e r n a t i o of n aChina’s l S e t t lnational e m e n taccounts,” s . * C h i nBrookings a on March 7, 2019, by Wei Chen, Xilu Chen, Chang-Tai Hsieh (University of Chicago), and Zheng (Michael) Song (Chinese University of Hong Kong). “China’s economy is about 12 d j real u s t growth e d b a shas e d been u p overstated o n “ A f obyr e about n s i c 2e percentage x a m i n a tpoints i o n o annually f C h i n in a ’ recent s n a t iyears”. o n a l a c c o u n t s ,” B r o o k in g s percent smaller than official figures indicate anda its

In s titu te o n M a r c h 7 , 2 0 1 9 , b y W e i C h e n , X ilu C h e n , C h a n g -T a i H s ie h (U n iv e r s ity o f

Danielle DiMartino Booth CEO & Chief Strategist for Quill Intelligence LLC CEO & Chief Strategist for Quill Intelligence LLC Wall Street Federal Reserve National Best Seller Global Speaker Seasoned Thought Leader Intelligence Gathering Toolsets Graph Analytics DAILY MARKETS & ECONOMICS INTELLIGENCE The Daily Feather WEEKLY MACRO DEEP ANALYSES The Weekly Quill

THANK YOU Danielle DiMartino Booth danielle@quillintelligence.com