Our Globally Interdependent Economy

McVEAN

Trading & Investments, LLC

Our Globally Interdependent Economy December 8, 2017

Michael Drury Chief Economist McVean Trading and Investments, LLC

Past Performance Is Not Necessarily Indicative Of Future Results.

1

U.S. MAP

R SUBU

RUST BE

B SU

BS R U

LT

BS

SUNBELT

Past Performance Is Not Necessarily Indicative Of Future Results.

2

U.S.; EUROPE; CHINA

SUBURBS

RUST BELT

Past Performance Is Not Necessarily Indicative Of Future Results.

SUNBELT

3

2017 GLOBAL GDP $78.0 TRILLION

NAFTA $22.0T

EUROPE $17.9T

US $19.4T

EUROZONE $11.7T

JAPAN+SOUTH KOREA+TAIWAN $6.9T CHINA $11.8T OPEC+ BRAZIL+ AUSTRALIA+ RUSSIA+ ARGENTINA $8.7T

OTHER $10.7T

Source: IMF Past Performance Is Not Necessarily Indicative Of Future Results.

4

REAL GDP CURRENT QTR % CHANGE FROM YEAR AGO 14%

12%

10%

8%

6%

4%

2%

0%

-2%

RTC CRISIS

NASDAQ BUBBLE

-4%

LEHMAN -6%

Q3 2017 Past Performance Is Not Necessarily Indicative Of Future Results.

5

REAL GDP CURRENT QTR % CHANGE FROM YEAR AGO 14%

12%

10%

8%

6%

4%

2%

0%

-2%

NIKKEI BUBBLE

ASIAN CRISIS

-4%

LEHMAN -6%

Q3 2017 Past Performance Is Not Necessarily Indicative Of Future Results.

6

US TRADE BALANCE AS A % OF GDP 4 4 QTR QTR AVERAGE AVERAGE

2%

1%

0%

-1%

-2%

C PE O N A P JA

I AS

A

-3%

NA I CH

-4%

-5%

-6%

Q3 2017

Past Performance Is Not Necessarily Indicative Of Future Results.

7

OUR INVESTMENT IS THEIR PRODUCTION AND VICE VERSA 70% 65%

PRODUCERS' DURABLE EQUIPMENT THREE MONTH AVERAGE

60% 55% 50% 45% 40% 35% 30%

IMPORTS / CONSUMPTION

EXPORTS / PRODUCTION

Past Performance Is Not Necessarily Indicative Of Future Results.

8

CHINA MARKIT PMI: MANUFACTURING VS SERVICES 55

54

53

52

51

50

49

48

47 42124 42185 42247 42308 42369 42429 42490 42551 42613 42674 42735 42794 42855 42916 42978 43039 42094 42155 42216 42277 42338 42400 42460 42521 42582 42643 42704 42766 42825 42886 42947 43008 43069

MANUFACTURING

SERVICES

Past Performance Is Not Necessarily Indicative Of Future Results.

Nov-17

9

US, EUROPE, JAPAN PMI 3 3 MONTH MONTH AVERAGE AVERAGE

60

80.00

55

65.00

50

50.00

45

35.00

40

20.00

35

5.00

30

-10.00 Eurozone

US

JAPAN (RS)

Past Performance Is Not Necessarily Indicative Of Future Results.

Nov-17

10

CHINA NOMINAL GDP GROWTH IN US$ CURRENT CURRENT QUARTER QUARTER % % CHANGE CHANGE FROM FROM YEAR YEAR AGO AGO

36%

32%

28%

24%

20%

16%

12%

8%

4%

0%

Q3 2017 Past Performance Is Not Necessarily Indicative Of Future Results.

11

COPPER VS CRUDE 450

150

360

120

270

90

180

60

90

30

0

0

Copper

WTI Crude Oil

Dec17

Past Performance Is Not Necessarily Indicative Of Future Results.

12

AVERAGE AVERAGE PRICE PRICE FOR FOR NEW NEW RESIDENTIAL RESIDENTIAL BUILDINGS BUILDINGS IN IN CHINA % % CHANGE CHANGE FROM FROM YEAR YEAR AGO AGO

12.5

10

7.5

5

%

2.5

X

0

-2.5

-5

-7.5

Oct-17 Past Performance Is Not Necessarily Indicative Of Future Results.

13

CHINA SOCIAL FINANCING 12 12 MONTH MONTH AVERAGE AVERAGE

1750

1500

1250

1000

750

500

250

Oct-17 Past Performance Is Not Necessarily Indicative Of Future Results.

14

YUAN PER US DOLLAR (INVERTED (INVERTED SCALE) SCALE)

6 6.2 6.4 6.6 6.8 7 7.2 7.4 7.6 7.8 8 8.2

Dec 2017

Past Performance Is Not Necessarily Indicative Of Future Results.

15

CHINESE CHINESE RAILROAD RAILROAD FREIGHT FREIGHT VS VS ELECTRICITY ELECTRICITY PRODUCTION PRODUCTION 3 3 MONTH MONTH AVERAGE AVERAGE % % CHANGE CHANGE FROM FROM YEAR YEAR AGO AGO 3 3 MONTH MONTH AVERAGE AVERAGE

30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0%

RAIL

ELECTRICITY PRODUCTION

Oct17

Past Performance Is Not Necessarily Indicative Of Future Results.

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CHINA EXPORTS VS IMPORTS

3 3 MONTH MONTH AVERAGE AVERAGE %CH %CH FROM FROM 3 3 MONTH MONTH AVERAGE AVERAGE YEAR YEAR AGO AGO 66.0%

49.5%

33.0%

16.5%

0.0%

-16.5%

-33.0%

EXPORTS

IMPORTS

Past Performance Is Not Necessarily Indicative Of Future Results.

Oct-17 17

CHINESE POLITBURO STANDING COMMITTEE

Xi Jinping

1953

Li Keqiang

1955

Wang Qishan

1948

Li Zhanshu

1950

Wang Huning

1955

Wang Yang

1955

Zhao Leji

1957

Han Zheng

1954

Hu Chunhua

1963

Chen Min’er

1963

Past Performance Is Not Necessarily Indicative Of Future Results.

18

CHINESE POLITBURO SCORECARD

Retired by age rule

11

5 from Standing Committee

Forced retirement

3

2 from China Youth League

Expelled

1

Sun Zhengcai

Available Promotions

15

Military

1 of 1

Vice Premiers

2 of 3

Hu Chunhua also promoted

General Secretariat

5 of 5

One non-politburo concession

Provincial Leaders

5 of 6

Xinjiang chief Li Keqiang ally

Xi choices

13 of 15

WOW

Past Performance Is Not Necessarily Indicative Of Future Results.

19

CHINA LEADERSHIP SHUFFLE: IS IT A DONE DEAL?

Provincial Governor or Mayor

Provincial Party Secretary

Pre-Xi

2

3

Pre-2016

2

2

2016

15

12

2017

11

14

Vacant

1

0

31

31

Past Performance Is Not Necessarily Indicative Of Future Results.

20

ONE BELT, ONE ROAD

Past Performance Is Not Necessarily Indicative Of Future Results.

21

CHINA CORRELATES THEIR POLLUTION PROBLEM WITH CLIMATE CHANGE

Past Performance Is Not Necessarily Indicative Of Future Results.

22

CHINA STOCK MARKET MONTHLY MONTHLY

6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000

Nov 17 Past Performance Is Not Necessarily Indicative Of Future Results.

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