2020: the olympics, the election and the markets let the ... - john traynor - session... · annual...

Wealth Management Client

2020: The Olympics, The Election and The Markets - Let the Games Begin!

9th Annual Economic Forum with CTTMA, XPX CT & ACG CTCT’s Fiscal Stability & Economic GrowthFairfield University’s Dolan School of BusinessNovember 25, 2019

Presented By:

John S. Traynor, Executive Vice President, Chief Investment Officer

The State of the Global Economy

2

Will our Global Leaders perform like a finely tuned

Racing Shell or a Motley Crew?

Post WWII Today

Bretton Woods Brexit

WTO Tariff Man

Capitalism Socialism

Individual Liberty Autocracy

3

Virtuous Cycle Sugar Rushor

Two paths the Economy could take in 2019

• Repatriation and Tax Reform should elongate the expansion but not lead to the hoped-for sustainable 3%+ economic growth.

Continued Economic Growth

4

Source: US. Bureau of Labor Statistics

• Once wage growth reaches 4% on average, it is just over 2 years to a recession

Economic Outlook

People’s United Advisors, economic views as of August 2019. People’s United Advisors develops multiple investment strategies and utilizes various instruments to execute those strategies for clients. The perspectives and outlook of individual strategists may differ from those reflected herein.

Economic Metric* 2017 2018 2019 2020Actual Actual Estimates Estimates

U.S. GDP (y-o-y) 2.2% 2.9% 2.3% 1.8%

Global GDP 3.7% 3.6% 3.2% 3.0%

Inflation (core PCE) 1.6% 2.0% 1.8% 1.9%

Fed Funds 1.25 –1.50% 2.25 – 2.50% 1.50 – 1.75% 1.00 – 1.25%

10yr Treasury 2.40% 2.69% 1.5 – 1.75% 1.5 – 2.0%

Unemployment 4.4% 3.9% 3.7% 3.8%

Crude Oil (WTI) $57.88 $45.15 $45 - $85 $45 - $85

*All values are for period-end except GDP. Global GDP estimates are from IMF July ‘19 World Economic Outlook.

• Slower U.S. and slower global growth due to trade friction and low capital spending.• Low probability of a U.S. recession before 2021• Oil prices remain dependent on geopolitics and supply conditions.

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The State of the U.S. Economy

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Pennsylvania Ave. - Republicans and Democrats

TradeForeign RelationsRegulation

TaxesSpendingImmigration

A tight election on the horizon

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• If above 1.4% the President is re-elected

• Current reading is 2.05%

Source: Strategas

The Yield Curve As A Stock Market Indicator

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Still room for equities to move higher

Source: Bloomberg, Board of Governors of the Federal Reserve

The Yield Curve Traditionally our best indicator

Has the extraordinary Fed stimulus distorted this indicator?

Inverted Yield Curve

Yield curve Spread (10yr-2yr)

S&P 500

Investing in 2020

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• We believe investors should be holding a late cycle portfolio.

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• Since peak employment in 1989 CT has gained only 19,900 jobs• CT has gained back just 84.8% of jobs lost during recession.• US has gained back 236%.• Massachusetts has regained 352% of jobs lost since 2009.

Northeast Economic Review

Source: Bureau of Labor Statistics

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• Connecticut’s decline since the year before the recession has been terrible.

• Massachusetts and New York have both rebounded strongly considering the heavy weight of the financial services industry in their respective economies.

Source: Bureau of Economic Analysis

CT


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Source: Bureau of Economic Analysis

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The Northeast Shows Its Smarts

More MacArthur fellows are born in NY than any other state

The Northeast dominates the country in attracting MacArthur fellows

Top locations per 100,000 people

1. Washington DC2. Massachusetts3. New York4. Rhode Island5. Connecticut6. Vermont


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U.S. Census Bureau: Community Survey

Towns below 30% with a Bachelor’s Degree **

Towns between 30%-40% with a Bachelor’s Degree**

Towns above 40% with a Bachelor’s Degree**

A Rising Tide Lifts All Boats

*Median wages around $15 per an hour

*Median hourly wages between $19 and $20

*Source: Economic Policy Institute

**Source: U.S. Census Bureau, 2010-2014 American Community Survey 5-Year Estimates

*The difference in annual income between below 30% and above 40% is $10,000 for full-time employees.

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Fairfield County has continued to outpace the national earnings estimate when compared to educational attainment. This will have both a strong short-term and long-term impact on the overall economic stability and result in lower unemployment rates.

Fairfield County Educational Attainment vs Earnings

Chart1

Bachelor's DegreeBachelor's Degree

Bachelor's DegreeBachelor's Degree

Graduate or Professional DegreeGraduate or Professional Degree

Graduate DegreeGraduate Degree

Professional DegreeProfessional Degree

Fairfield County

National Average

Source: Census Bureau Educational Attainment

Fairfield County vs. National Average(Earnings to Educational Attainment)Data Range: 2010-2014

68480

59124

90941

69732

89960

Sheet1

Fairfield County

Earnings by Educational Attainment

Data: 2010-2014

Source: U.S. Census Bureau

TownsEducation LevelEstimated Earnings

Fairfield CountyBachelors Degree$ 68,480.00

Graduate or Professional Degree$ 90,941.00

BridgeportBachelors Degree$ 44,542.00


BrookfieldBachelors Degree$ 60,256.00


DanburyBachelors Degree$ 56,724.00


DarienBachelors Degree$ 92,702.00


EastonBachelors Degree$ 83,207.00


FairfieldBachelors Degree$ 86,053.00


GreenwichBachelors Degree$ 76,614.00


MonroeBachelors Degree$ 75,368.00


New CanaanBachelors Degree$ 91,875.00


New FairfieldBachelors Degree$ 75,208.00


NewtonBachelors Degree$ 78,523.00


NorwalkBachelors Degree$ 69,410.00


ReddingBachelors Degree$ 68,415.00


RidgefiedBachelors Degree$ 83,674.00


SheltonBachelors Degree$ 63,760.00


ShermanBachelors Degree$ 77,760.00


StamfordBachelors Degree$ 67,190.00


StratfordBachelors Degree$ 56,451.00


TrumbullBachelors Degree$ 72,389.00


WestonBachelors Degree$ 105,156.00


WestportBachelors Degree$ 86,520.00


WiltonBachelors Degree$ 92,917.00


Sheet2

Bachelor's DegreeBachelor's DegreeGraduate or Professional DegreeGraduate DegreeProfessional Degree

Fairfield County$ 68,480.00$ 59,124.00$ 90,941.00$ 69,732.00$ 89,960.00

National Average

Sheet2

Fairfield County

National Average

Source: Census Bureau Educational Attainment

Fairfield County vs. National Average(Earnings to Educational Attainment)Data Range: 2010-2014

Sheet3

Towns Below 30% With A Bachelors DegreesTowns Between 30%-40% With A Bachelors Degrees

Bridgeport16.5%Danbury30.5%

Bethel39.9%

Stratford30.7%

Towns above 40% With A Bachelors Degrees

Darien79.7%

Easton57.9%

Fairfield62.2%

Greenwich66.4%

New Canaan76.2%

Newtown54.4%

Redding70.1%

Ridgefield72.6%

Sherman52.4%

Trumbull51.2%

Weston84.0%

Westport75.7%

Wilton75.9%

Brookfield48.5%

Monroe50.0%

New Fairfield46.1%

Norwalk41.1%

Shelton37.8%

Stamford45.8%

Sheet4

People’s United Advisors Inc.

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Important Disclosure Information

Slide Number 1The State of the Global EconomyTwo paths the Economy could take in 2019�Continued Economic GrowthEconomic OutlookThe State of the U.S. EconomyA tight election on the horizonThe Yield Curve As A Stock Market IndicatorInvesting in 2020Northeast Economic ReviewNortheast Economic ReviewNortheast Economic ReviewNortheast Economic ReviewSlide Number 14Slide Number 15People’s United Advisors Inc.

2020: the olympics, the election and the markets let the ... - john traynor - session... · annual...

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