Before the Bell · 3/19/2020 · Americans, $50 billion in loans to the airline industry, and $150 billion for “severely distressed sectors” of the economy. However, developments

Notations:

For further information on any of the topics mentioned, please contact your Financial Advisor. Unless specifically stated otherwise, comments contained in this document should not be construed as an investment opinion or

recommendation of any securities mentioned. Charts depicted are from FactSet unless otherwise noted. ____________________________________________________________________________________________________________________________ © 2020 Ameriprise Financial, Inc. All rights reserved. Page 1 of 12

Before the Bell Morning Market Brief

March 19, 2020

FOR IMPORTANT DISCLOSURES, PLEASE SEE THE DISCLOSURE PAGES AT THE END OF THIS DOCUMENT

MORNING MARKET COMMENTARY: Anthony M. Saglimbene, Global Market Strategist

Quick Take: U.S. futures are pointing to a lower open; European markets are trading mostly down; Asia ended lower overnight; West Texas Intermediate (WTI) oil trading at $22.39; 10-year U.S. Treasury yield slumping to 1.19%.

Finding The Bottom Is Often A Process: As we highlighted on Tuesday, the first FactSet chart below makes stock declines abundantly clear. In fact, the S&P 500 Index is off nearly 30% from its February 19th high and has quickly returned to its December 2018 low. The Index fell below 2350 intraday on Wednesday, before closing above the marker by the end of trading. Given that traditional moving average markers are meaningless at the moment, investors should watch how the Index trades around its December 2018 lows. Traders tested the level for potential support yesterday, and the index was able to hold and finish above this new psychological threshold. But given how volatile markets are at the moment, the level could also just as easily prove another signpost marking the way lower for stock prices. We stress, stocks are unlikely to find a lasting equilibrium without more clarity on the COVID-19 U.S. health crisis and the growing impacts of an economic stop.

Before The Bell March 19, 2020 ____________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________ © 2020 Ameriprise Financial, Inc. All rights reserved. Page 2 of 12

The second BCA Research chart below shows the S&P 500’s moving averages on a much longer time horizon. And while we wouldn't put much stock in 6-year and 12-year moving averages to inform a technical support level, they visually show just how one-sided the previous bull market was over several years. Outside of late 2018, brief pull-backs in 2015/2016 and 2011/2012 highlight the only other two mentionable pullbacks over the last eleven years or so. Bottom line: stocks are in unchartered territory, and investors should expect continued volatility until there is a greater understanding of the macro backdrop.

So in the absence of an apparent technical support level at the moment, let’s throw some history into the mix to finish this morning. This is the quickest and steepest drawdown for the S&P 500 going back to 1929. According to Bespoke Investment Group, the S&P 500 has seen a 49.1% decline from a record high, a

56.8% drawdown, and now a 30% decline from a record high over the last 20 years. And the current downturn may not be over.

There have been seven occurrences where the S&P 500 has fallen 30% or more going back to 1928. Over the short-term (i.e., one month and three months after reaching the 30% threshold), returns are mixed,

and the Index averages a further decline. Over the longer-term (i.e., six months and one year after reaching the 30% threshold), returns are generally

positive. However, during the Great Depression, 2001, and 2008, S&P 500 returns were flat-to-negative. Per Bespoke, when the S&P 500 first reaches the 30% down threshold, it has taken the S&P 500

roughly 1.7 years on average to find its bottom finally. Only once has the Index reached a bottom within one year.

Further, for the S&P 500 to reclaim a new high after falling 30% or more, it’s taken the Index 8.4 years on average to claim that prize. In the 1929 drawdown, it took the Index 25 years to see a new high. In 1987, it took the S&P 500 just 1.9 years to reclaim a new top. In more recent times, the S&P 500 took 7.2 years to recover from the 2000 drawdown and 5.5 years to recover from the financial crisis.

While not one of these past 30% drawdowns is entirely analogous to what’s happening today, two points stand out to us. 1) finding a bottom in stocks is a process that takes time, and 2) it usually takes a good deal of time to reach new highs after such steep declines.

This leads us to our most critical message in this missive — It would be wise for investors to start extending their lens past the here and now, entertaining the idea of a more prolonged recovery in stock prices. Importantly, chart your course toward the opportunities that can add value to your portfolio over time by being disciplined and prudent with your investment decisions today.



Asia-Pacific: Asian equities finished lower on Thursday. Per Bloomberg, China’s Hubei province (ground zero for the COVID-19 outbreak) reported no new infections on Wednesday for the first time since the virus emerged in January. China is lifting mass quarantine policies in lower-risk areas, and China President Xi Jinping is encouraging its citizens and businesses to return to work. Interestingly, new COVID-19 cases in China are coming from patients who brought the disease from other countries. Given the carefully controlled nature of news flow in the country, we would remain guarded but encouraged about recent developments.

Europe: Markets across the region are trading down at mid-day. Overnight, the European Central Bank (ECB) announced the €750 billion Pandemic Emergency Purchase Program (PEPP) to help keep liquidity flowing through Europe’s economy. The program will run until the end of 2020 and is designed to purchase private and public securities included in its existing asset purchase program. Importantly, PEPP will be more flexible in where (e.g., the countries) it can purchase securities as opposed to directly adhering to existing capital keys

U.S.: Equity futures are pointing to a lower open. Here’s a quick rundown to start your morning: Overnight, the Senate passed the Families First Coronavirus Relief Act, and President Trump signed the

legislation into law. The relief package will provide free testing, additional unemployment compensation funds, a new mandatory leave program for employers with less than 500 employees, and some tax credits for certain employers to offset the costs.

According to Bloomberg, the White House is seeking additional funds from Congress in the ballpark of $1.3 trillion to help address the COVID-19 fallout. The ask includes $500 billion in direct payments to Americans, $50 billion in loans to the airline industry, and $150 billion for “severely distressed sectors” of the economy. However, developments are fluid on the government relief front. The details of such a stimulus package are likely to change as developments on the ground evolve.

The Federal Reserve introduced the Money Market Mutual Fund Liquidity Facility (MMLF) to enhance liquidity and broaden the flow of private sector credit. Loans will be available to eligible financial institutions and are structured similarly to other asset-backed programs the Fed enacted in 2008 and early 2010, per FactSet.

Yesterday’s equity losses may have highlighted a flight-to-liquidity reaction, as the U.S. dollar index stretched toward multi-year highs. Currencies around the world plummeted against the dollar, including the British pound falling to its weakest level in 35 years, according to FactSet.

This space intentionally left blank.



WORLD CAPITAL MARKETS 3/19/2020 As of: 8:30 AM ET

Americas % chg. % YTD Value Europe (Intra-day) % chg. %YTD Value Asia/Pacific (Last Night) % chg. %YTD ValueS&P 500 -5.18% -25.45% 2,398.1 DJSTOXX 50 (Europe) -0.49% -36.39% 2,374.0 Nikkei 225 (Japan) -1.04% -29.97% 16,552.8 Dow Jones -6.30% -29.85% 19,898.9 FTSE 100 (U.K.) -1.68% -32.98% 4,995.4 Hang Seng (Hong Kong) -2.61% -22.64% 21,709.1 NASDAQ Composite -4.70% -21.88% 6,989.8 DAX Index (Germany) -0.75% -36.76% 8,378.1 Korea Kospi 100 -8.39% -33.67% 1,457.6 Russell 2000 -10.42% -40.42% 991.2 CAC 40 (France) -0.57% -37.44% 3,733.4 Singapore STI -4.73% -27.90% 2,311.0 Brazil Bovespa -10.35% -42.16% 66,895 FTSE MIB (Italy) 0.95% -35.06% 15,264.4 Shanghai Comp. (China) -0.98% -11.41% 2,702.1 S&P/TSX Comp. (Canada) -7.60% -30.84% 11,721.4 IBEX 35 (Spain) -0.11% -34.15% 6,267.7 Bombay Sensex (India) -2.01% -31.29% 28,288.2 Mexico IPC -3.61% -18.32% 35,532.7 MOEX Index (Russia) 3.21% -28.20% 2,180.5 S&P/ASX 200 (Australia) -3.44% -27.29% 4,782.9

Global % chg. % YTD Value Developed International % chg. %YTD Value Emerging International % chg. %YTD ValueMSCI All-Country World Idx -5.06% -28.43% 402.7 MSCI EAFE -4.28% -32.06% 1,376.2 MSCI Emerging Mkts -4.70% -29.13% 787.8 Note: International market returns shown on a local currency basis. Equity index data is total return, inclusive of dividends.

S&P 500 Sectors % chg. % YTD Value Commodities Communication Services -2.81% -21.24% 142.7 Equity Income Indices % chg. % YTD Value Futures & Spot (Intra-day) % chg. % YTD ValueConsumer Discretionary -4.93% -28.05% 707.1 JPM Alerian MLP Index -16.18% -67.53% 70.9 CRB Raw Industrials 0.00% -4.98% 429.3 Consumer Staples -3.07% -11.66% 568.9 FTSE NAREIT Comp. TR -9.61% -31.40% 14,648.8 NYMEX WTI Crude (p/bbl.) 8.05% -63.95% 22.0 Energy -14.28% -60.10% 179.9 DJ US Select Dividend -6.77% -32.68% 1,541.8 ICE Brent Crude (p/bbl.) 2.97% -61.18% 25.6 Financials -8.85% -37.87% 316.1 DJ Global Select Dividend -2.51% -41.73% 136.9 NYMEX Nat Gas (mmBtu) 0.25% -26.54% 1.6 Health Care -3.40% -17.71% 973.7 S&P Div. Aristocrats -5.91% -26.18% 2,264.5 Spot Gold (troy oz.) -1.19% -3.22% 1,468.4 Industrials -7.15% -33.83% 452.9 Spot Silver (troy oz.) -1.11% -33.63% 11.8

Materials -6.16% -32.86% 257.7 LME Copper (per ton) -7.78% -23.09% 4,729.5 Real Estate -7.46% -24.63% 180.1 Bond Indices % chg. % YTD Value LME Aluminum (per ton) -0.25% -8.70% 1,626.3 Technology -4.59% -19.38% 1,295.2 Barclays US Agg. Bond -2.07% -0.35% 2,217.2 CBOT Corn (cents p/bushel) 1.49% -13.81% 340.3 Utilities -4.64% -14.98% 277.2 Barclays HY Bond -3.05% -15.39% 1,846.8 CBOT Wheat (cents p/bushe 2.12% -7.61% 519.0

Foreign Exchange (Intra-day % chg. % YTD Value % chg. % YTD Value % chg. % YTD ValueEuro (€/$) -1.68% -4.29% 1.07 Japanese Yen ($/¥) -1.64% -1.16% 109.88 Canadian Dollar ($/C$) -0.77% -11.12% 1.46British Pound (£/$) -0.22% -12.63% 1.16 Australian Dollar (A$/$) -1.02% -18.62% 0.57 Swiss Franc ($/CHF) -1.34% -1.52% 0.98Data/Price Source: Bloomberg. Equity Index data is total return, inclusive of dividends, where applicable.

Ameriprise Global Asset Allocation Committee U.S. Equity Sector - Tactical View

S&P 500 GAAC GAAC S&P 500 GAAC GAAC

Index GAAC Tactical Recommended Index GAAC Tactical RecommendedSector Weight Tactical View Overlay Weight Sector Weight Tactical View Overlay Weight

1) Communication Services 10.5% Underweight - 2.0% 8.5% 6) Health Care 14.2% Equalweight - 14.2%

2) Consumer Discretionary 9.7% Overweight +2.0% 11.7% 7) Industrials 9.1% Equalweight - 9.1%

3) Consumer Staples 7.2% Equalweight - 7.2% 8) Information Technology 23.1% Equalweight - 23.1%

4) Energy 4.3% Equalweight - 4.3% 9) Materials 2.6% Equalweight - 2.6%

5) Financials 13.1% Equalweight - 13.1% 10) Real Estate 2.9% Overweight +1.0% 3.9%

11) Utilities 3.3% Underweight - 1.0% 2.3%

Ameriprise Global Asset Allocation Committee Global Equity Region - Tactical View

MSCI All-Country GAAC GAAC MSCI All-Country GAAC GAAC

World Index GAAC Tactical Recommended World Index GAAC Tactical RecommendedRegion Weight Tactical View Overlay Weight Region Weight Tactical View Overlay Weight

1) United States 55.6% Overweight +3.3% 58.9% 5) Latin America 1.4% Equalweight - 1.4%

2) Canada 3.0% Equalweight - 3.0% 6) Asia-Pacific ex Japan 12.4% Equalweight - 12.4%

3) United Kingdom 4.8% Equalweight - 4.8% 7) Japan 7.2% Underweight - 2.0% 5.2%

4) Europe ex U.K. 14.3% Equalweight - 14.3% 8) Middle East / Africa 1.3% Underweight - 1.3% -



BY THE NUMBERS: ECONOMIC ACTUALS AND FORECAST:

ECONOMIC NEWS OUT TODAY: Economic Releases for Thursday, March 19, 2020. All times Eastern. Consensus estimates via Bloomberg. Time Period Release Consensus Est. Actual Prior Revised to 8:30 AM Mar. 14 Initial Jobless Claims 225k 281k 216k 8:30 AM Mar. 7 Continuing Claims 1733k 1701k 1729k 1733k 8:30 AM MAR Philly Fed. Manufacturing Index 6.0 -12.7 36.7 10:00 AM FEB Leading Econ. Index +0.1% +0.8% Economic Perspective: Russell T. Price, CFA – Chief Economist New claims for unemployment insurance started what will likely be a historic rise with a moderate jump last

week. The actual number reported by the Labor department this morning far exceeded the forecast estimate but, as a contributor to the consensus ourselves, we believe most forecasters likely did not provide an estimate simply due to the very high uncertainty of the number over the near-term.

There is a very wide range of estimates as to where this number could go over the next few weeks, some estimating a million, some even two million – per week. It is very important to look at such data rationally and in the proper perspective, however. The U.S. economy is being asked to come to a sudden stop (as are other economies, unfortunately). The proper thing for small businesses and even large directly effected businesses, is to allow workers to collect unemployment benefits if they cannot afford to keep them on the payroll in the interim – and many cannot. Yes, the numbers speak to the very adverse economic situation, but they are also being amplified over the near-term by the unprecedented “stop” in economic activity.

Only time will tell, but we still believe the Federal Reserve and federal government will be able to support the economy through this period. Lessons were learned during the Financial Crisis, and unlike then, we have not seen any delays in action from federal officials as there were 12 years ago that made things worse. Most notably, the Federal Reserve has unlimited firepower, as do other major central banks. There are those that will try to leverage this response for their own purposes to say Federal Reserve actions will debase the dollar. No, not in our view. Monetizing debt can, and has historically proven to, be a very dangerous economic threat. But the translation device for hyper-inflation and eventual economic collapse under those historical scenarios is a currency collapse. But the trick is this: currencies are valued against each other. So, if one country is monetizing debt, yes, there are serious consequences. But when all major economies (i.e., central banks) are doing it, currency values are most likely to remain fairly static.

Provision stocking has outweighed a broader drop in retail sales – for now. Retail sales will drop significantly in the weeks ahead. As many might expect, however, the recent surge in preparation purchases (i.e., hording) has indeed far outweighed the declines being experienced in other retail categories.

As we’ve mentioned a few times in this space, the Johnson Redbook retail sales report has taken on added significance at this time as it offers a weekly measure of retail sales. The measure does not include the full spectrum of retail activity as does the monthly Retail Sales report from the Commerce Department, but its authors calculate that it covers categories encompassing about 80% of the Commerce Department report. The Redbook report is also much more volatile than Commerce’s Retail Sales report.

As seen in the chart at right (as sourced from FactSet), the Johnson Redbook Index surged last week (the data is for the week ending March 14th) suggesting a year-over-year gain of 8.5% – its strongest pace since the first week of

Current Projections:Actual Actual Actual Actual Est. Est. Actual Actual Actual Est. Est.2016 2017 2018 2019 2020 2021 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020

Real GDP (YOY) 1.6% 2.4% 2.9% 2.3% 1.5% 2.1% 2.0% 2.1% 2.1% 1.6% -2.0%

Unemployment Rate 4.7% 4.1% 3.9% 3.5% 3.6% 3.5% 3.7% 3.5% 3.5% 3.7% 3.7%

CPI (YoY) 1.3% 2.1% 2.4% 1.8% 1.8% 2.2% 1.8% 1.8% 2.0% 2.1% 1.6%

Core PCE (YoY) 1.7% 1.6% 1.9% 1.6% 1.6% 1.9% 1.6% 1.7% 1.6% 1.5% 1.7%

Sources: Historical data via FactSet. Estimates (Est.) via American Enterprise Investment Services, Inc.

YoY = Year-over-year, Unemployment numbers are period ending. GDP: Gross Domestic Product; CPI: Consumer Price Index

PCE: Personal Consumption Expenditures Price Index. Core excludes food and energy Last Updated:

Quarterly

March 6, 2020



2019. A deeper analysis of the data done by Moody’s Analytics shows that discount retailers experienced a very strong surge, with a yr./yr. gain of about 15%, while department stores saw sales decline about 6% yr./yr.

The chart at right is sourced from FactSet.

FIXED INCOME NEWS & VIEWS: Brian M. Erickson, CFA, Fixed Income Research & Strategy

Stunning: Treasury Prices Fall and Yields Rise as Stocks Sell-off Treasury markets twisted Wednesday disrupting the traditional pattern of Treasury prices moving in the opposite

direction of stock prices. The Treasury curve steepened with short-end yields falling and long-term yields moving promptly higher. See the Treasury curve chart below.

Why the strange Treasury market move? We believe sizable competing forces are at play in Treasury markets. Measures of support include the flight to quality from both domestic and global investors, as well as the decline in inflation expectations that accompany a contraction. Conversely, investors looking for liquidity resort to selling what they can sell when fixed income markets turn illiquid. Today, that includes selling Treasuries. We also believe sovereign debt sales by Russia and Saudi Arabia fund fiscal deficits after crude wars resulted in a sharp drop in crude revenues. China’s stimulus efforts likely require sales from sovereign wealth funds that likely include Treasuries. These potentially scaled sellers drove the Fed’s commitment to purchase $500 billion Treasuries and $200 billion mortgage backed securities, in our view, providing a natural counter party for sovereign wealth sellers. Finally, a potential $1 trillion spending package means $1 trillion of additional Treasury issuance that may require an expansion of U.S. Treasury debt issuance into 25-year and 50-year auctions.

On the very short-end, 3-month Treasury yields fell into negative territory to -0.01%.

Treasury Yield Curve Comparison

Source: Bloomberg L.P.



‘Whatever It Takes’ – Fiscal Authorities Step-up and Central Banks Expand Support The policy response seeking to counter and soften the negative coronavirus impact continues to mount with a growing

list of central banks adding accommodative policy measures and fiscal authorities committing to critical spending. We believe the collective response gained momentum this week after fits and starts over the past few weeks.

The European Central Bank quickly backtracked on ECB President Lagarde’s comment last week that the central bank’s focus did not center on sovereign debt funding spreads. Ten-year Italian sovereign yields declined 54 basis points to 1.89% this morning as bond markets priced in the ECB’s efforts. The ECB announced a 750 billion euro purchasing program that encompasses commercial paper and even Greek sovereign debt. The key is not the size, but the expansive scope of what the ECB can buy. Similar to the Fed’s recent quantitative easing (QE) program, it’s not intended as incremental buying each month, rather immediately available capacity to support asset markets. We would expect the facility to be active today making sizeable purchases to punctuate the ECB’s firm presence.

U.S. Fiscal response: Congress passed, and President Trump signed a second virus aid package aimed at paid time off for workers with the virus who would not be paid when away from work. Congress and the White house continue to work through the mechanics of a $1 trillion stimulus package that would bridge funding for consumers living paycheck to paycheck and businesses seeking to remain solvent with closed doors.

Expanded Fed Response: The Fed announced a commercial paper funding facility Tuesday layering in yet another source of short-term funding for corporations. Repo market liquidity and Treasury purchases continue to be hallmarks of the Fed’s efforts to liquify borrowing for banks. The Fed already tapped rate cuts, repo support, lending from the discount window (by 8 banks Wednesday) commercial paper funding, quantitative easing (bond buying), trimming bank regulatory capital rules and currency swaps with five key foreign central banks. Still available to the Fed are tools including forward guidance, rate targeting similar to the Bank of Japan to manage the shape of the curve, expanding its mandate to include corporate bonds, term auction facilities (think TALF from the financial crisis

We believe fiscal support shaping up to moderate the economic disruption as the global economy slows coupled with the liquidity boosts served up by central banks help companies and consumers avoid the worst outcomes from a sudden stop in activity. At the same time, we do not believe the offset can fully refill the hole left by social distancing, on-line learning, and closed businesses. We also believe central bank policy accommodation also sets-up the post-shock support for a recovery. Overall, the believe the policy response is remarkable, yet global growth also

Bank Loan Funds – Who Pulled the Plug? The S&P/LSTA Loan Price Index fell to $81, from $94 less than two weeks ago on March 8. At current levels the new

issue market is likely closed as existing loans priced at a discount are more attractive. When it comes to investments with heightened default risk, a lower entry price both increases the investment yields relative to the coupon and also reduces the potential downside from a default event. As a result, high yield and bank loan investors maintain a strong preference for discounted debt.

The year to date total return on the S&P/LSTA Loan Index dropped -14.7% including the sell-off Wednesday. Whereas the S&P 500 Index shows sharp price swings up and down, the S&P/LSTA Loan Price Index has essentially been a one-way trip lower since February 23. We recommended avoiding the bank loan market last year and that call stands as affirmed, in our view, by the sharp drop in prices.

We see several drivers. First, as a floating rate instrument, bank loan coupons which rose as the Fed hiked rates from 2015-2018, fell sharply as the Fed cut rates to essentially zero this month. Second, bank loan funding commonly funded some of the most levered companies from private equity sponsors. The drop-off in business and consumer activity could quickly challenge top line growth and lead cash flow coverage levels lower in the second quarter. Companies navigating thin margins in this highly leveraged sector may become bankruptcy candidates as a result of the potential 2Q economic contraction Third, syndicated loans serve as the exit strategy for banks committing to provide financing for highly leveraged mergers and acquisitions. Banks are on the hook for approximately $35 billion of loans commitments, according to Bloomberg, that will be difficult to clear though the bank loan market given the change in economic realities and the rise in risk premiums. We believe banks originating loans will need to crystalize meaningful losses to find new buyers, which serves as a hit to bank capital at a time when banks need capital to support revolving credit drawdowns and dealer balance sheets. Fourth, nearly half the supply of loans become fodder for the collateralized loan market (CLO). The economics of CLOs deteriorated sharply as investors repriced risk levels across the capital structure from AAA-rated down to equity in the securitizations. According to Bloomberg more than 100 warehouse facilities were actively building collateral for future CLO issuance. Should markets remain close to new CLO issuance, market likely need to clear the market as equity sponsors receive calls to add capital (effectively margin calls).

We affirm our recommendation to avoid the segment. We do not see the recent sell-off as a buying opportunity rather a harbinger of what’s to come. We believe the loan market is the canary in the coal mine for corporate



credit markets, and that more risk lies just out of view in the space. A time will come to step-in, but we see the entry point months ahead. In the bond markets, there is no such thing as a bad bond, just bad pricing in our view.

Checking in on broader credit markets, spreads on the Bloomberg Barclays U.S. Investment Grade Bond Index,

Bloomberg Barclays U.S. High Yield Corporate Index, and the JPMorgan Emerging Market Bond Index all reached their widest levels in a decade. We believe the second quarter contraction coupled with the rapid shift toward deleveraging drove the move. While spreads may continue wider in the near-term we believe investors using a selective approach can find opportunities as investors sell high quality investments that continue to be bid. We recommend active management or following out Corporate Bond Recommended List.

Separately, money market assets rose to $3.7 trillion as of March 11 the highest level since 2009 according to ICI figures. In the past, increases in money market funds coincided with the run up to the past two official recessions.

This space intentionally left blank.



Ameriprise Investment Research Group Ameriprise Financial 1441 West Long Lake Road, Suite 250, Troy, MI 48098 [email protected] For additional information or to locate your nearest branch office, visit ameriprise.com RESEARCH & DUE DILIGENCE LEADER

Lyle B. Schonberger - Vice President Business Unit Compliance Liaison (BUCL)

Jeff Carlson, CLU, ChFC – Manager

Investment Research Coordinator Kimberly K. Shores Sr Administrative Assistant Jillian Willis EQUITY RESEARCH Equity Research Director Justin H. Burgin – Vice President

Consumer Goods and Services Patrick S. Diedrickson, CFA – Director

Energy/Utilities William Foley, ASIP – Director

Financial Services/REITs Lori Wilking-Przekop – Sr Director

Health Care Daniel Garofalo – Director

Industrials/Materials Frederick M. Schultz – Director

Technology/Telecommunication Open – Director

Quantitative Strategies/International Andrew R. Heaney, CFA – Director

STRATEGISTS CHIEF MARKET STRATEGIST David M. Joy – Vice President GLOBAL MARKET STRATEGIST Anthony M. Saglimbene – Vice President

Thomas Crandall, CFA, CMT, CAIA – Sr Director, Asset Allocation

Cedric Buermann Jr., CFA – Analyst, Asset Allocation Gaurav Sawhney – Research Analyst

Amit Tiwari, CFA – Sr Research Associate CHIEF ECONOMIST Russell T. Price, CFA – Vice President MANAGER RESEARCH

Michael V. Jastrow, CFA – Vice President

Jeffrey R. Lindell, CFA – Director – ETFs & CEFs

Mark Phelps, CFA – Director – Multi-Asset Solutions Equities Christine A. Pederson, CAIA, CIMA – Sr Director – Growth Equity, Infrastructure & REIT

Benjamin L. Becker, CFA – Director – International/Global Equity

Alex Zachman, CFA – Analyst – Core Equity

Cynthia Tupy, CFA – Director – Value and Equity Income Equity Fixed Income & Alternatives Jay C. Untiedt, CFA, CAIA – Sr Director – Alternatives

Steven T. Pope, CFA, CFP® – Director – Non-Core Fixed Income

Douglas D. Noah, CFA – Analyst – Core Taxable & Tax-Exempt Fixed Income

Blake Hockert – Associate – Reporting & Analytics

FIXED INCOME RESEARCH & STRATEGY

Fixed Income Research Brian M. Erickson, CFA – Vice President High Yield and Investment Grade Credit Jon Kyle Cartwright – Sr Director

Stephen Tufo – Director INVESTMENT DUE DILIGENCE

Justin E. Bell, CFA – Vice President

Kurt J. Merkle, CFA, CFP®, CAIA – Sr. Director

Kay S. Nachampassak – Director

Peter W. LaFontaine – Sr. Analyst

James P. Johnson, CFA, CFP® – Sr. Analyst

David Hauge, CFA – Analyst

Bishnu Dhar – Sr. Research Analyst

Parveen Vedi – Sr. Research Associate

Darakshan Ali – Research Process Trainee

INNOVATION AND DEVELOPMENT

Allen Rodrigues – Vice President

Nidhi Khandelwal – Director

Dan Burns – Sr. Manager

Matt Morgan – Sr. Manager

Natasha Wayland – Sr. Manager



The content in this report is authored by American Enterprise Investment Services Inc. (“AEIS”) and distributed by Ameriprise Financial Services, Inc. (“AFSI”) to financial advisors and clients of AFSI. AEIS and AFSI are affiliates and subsidiaries of Ameriprise Financial, Inc. Both AEIS and AFSI are member firms registered with FINRA and are subject to the objectivity safeguards and disclosure requirements relating to research analysts and the publication and distribution of research reports. The “Important Disclosures” below relate to the AEIS research analyst(s) that prepared this publication. The “Disclosures of Possible Conflicts of Interest” section, where applicable, relates to the conflicts of interest of each of AEIS and AFSI, their affiliates and their research analysts, as applicable, with respect to the subject companies mentioned in the report. Each of AEIS and AFSI have implemented policies and procedures reasonably designed to ensure that its employees involved in the preparation, content and distribution of research reports, including dually registered employees, do not influence the objectivity or timing of the publication of research report content. All research policies, coverage decisions, compensation, hiring and other personnel decisions with respect to research analysts are made by AEIS, which is operationally independent of AFSI. IMPORTANT DISCLOSURES As of December 31, 2019 The views expressed regarding the company(ies) and sector(s) featured in this publication reflect the personal views of the research analyst(s) authoring the publication. Further, no part of research analyst compensation is directly or indirectly related to the specific recommendations or views contained in this publication. A part of a research analyst’s compensation may be based upon overall firm revenue and profitability, of which investment banking, sales and trading, and principal trading are components. No part of a research analyst’s compensation is based on a specific investment banking transaction, nor is it based on sales, trading, or principal trading. A research analyst may have visited the material operations of one or more of the subject companies mentioned in this research report. No payment was received for the related travel costs. Additional information and current research disclosures on individual companies mentioned in this research report are available on our website at ameriprise.com/legal/disclosures in the Additional Ameriprise research disclosures section, or through your Ameriprise financial advisor. You may also submit a written request to Ameriprise Financial, Inc., 1441 West Long Lake Road, Troy MI, 48098. Independent third-party research on individual companies is available to clients at ameriprise.com/research-market-insights. SEC filings may be viewed at sec.gov. Tactical asset class recommendations mentioned in this report reflect The Ameriprise Global Asset Allocation Committee’s general view of the financial markets, as of the date of the report, based on then current conditions. Our tactical recommendations may differ materially from what is presented in a customized long-term financial plan or portfolio strategy. You should view our recommendations in conjunction with a broader long-term portfolio strategy. Not all products, services, or asset classes mentioned in this report may be available for sale at Ameriprise Financial Services, Inc. Please consult with your financial advisor. Diversification and Asset Allocation do not assure a profit or protect against loss. RISK FACTORS Dividend and interest payments are not guaranteed. The amount of dividend payment, if any, can vary over time and

issuers may reduce or eliminate dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer. Should a company be unable to pay interest on a timely basis a default may occur and interruption or reduction of interest and principal occur. Investments in a narrowly focused sector may exhibit higher volatility than investments with broader objectives and is subject to market risk and economic risk. Income Risk: We note that dividends are declared solely at the discretion of the companies’ boards of directors. Dividend cuts or eliminations will likely negatively impact underlying company valuations. Published dividend yields are calculated before fees and taxes. Dividends paid by foreign companies to ADR holders may be subject to a withholding tax which could adversely affect the realized dividend yield. In certain circumstances, investors in ADR shares have the option to receive dividends in the form of cash payments, rights shares or ADR shares. Each form of dividend payment will have different tax consequences and therefore generate a different yield. In some instances, ADR holders are eligible to reclaim a portion of the withholding tax. International investing involves increased risk and volatility due to political and economic instability, currency fluctuations, and differences in financial reporting and accounting standards and oversight. Risks are particularly significant in emerging markets. Market Risk: Equity markets in general could sustain significant volatility due to several factors. As we have seen recently, both economic and geopolitical issues could have a material impact on this model portfolio and the equity market as a whole. Quantitative Strategy Risk: Stock selection and portfolio maintenance strategies based on quantitative analytics carry a unique set of risks. Quantitative strategies rely on comprehensive, accurate and thorough historical data. The Ameriprise Investment Research Group utilizes current and historical data provided by third-party data vendors. Material errors in database construction and maintenance could have an adverse effect on quantitative research and the resulting stock selection strategies. PRODUCT RISK DISCLOSURES Exchange Traded Funds (ETF) trade like stocks, are subject to investment risk and will fluctuate in market value.



For additional information on individual ETFs, see available third-party research which provides additional investment highlights. SEC filings may be viewed at sec.gov All fixed income securities are subject to a series of risks which may include, but are not limited to: interest rate risk, call risk, refunding risk, default risk, inflations risk, liquidity risk and event risk. Please review these risks with your financial advisor to better understand how these risks may affect your investment choices. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities. This means you may lose money if you sell a bond prior to maturity as a result of interest rate or other market movement. Any information relating to the income or capital gains tax treatment of financial instruments or strategies discussed herein is not intended to provide specific tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent tax professional. A real estate investment trust or REIT is a company that owns and operates income-producing real estate. In addition, some REITs participate in the financing of real estate. To qualify as a REIT, a company must: I) invest at least 75% of its total assets in real estate assets, II) generate at least 75% of its gross income from real property or interest, and III) pay at least 90% of its taxable income to shareholders in the form of distributions. A company that qualifies as a REIT is permitted to deduct the distributions paid to shareholders from its corporate taxes. Consequently, many REITs target to payout at least 100% of taxable income, resulting in virtually no corporate taxes. An investment in a REIT is subject to many of the same risks as a direct investment in real estate including, but not limited to: Illiquidity and valuation complexities, redemption restrictions, distribution and diversification limits, tax consequences, fees, defaults by borrowers or tenants, market saturation, balloon payments, refinancing, bankruptcy, decreases in market rates for rents and other economic, political, or regulatory occurrences affecting the real estate industry. Ratings are provided by Moody’s Investors Services and Standard & Poor’s. Non-Investment grade securities, commonly known as "high-yield" or "junk" bonds, are historically subject to greater risk of default, including the loss of principal and interest, than higher-rated bonds, which may result in greater price volatility than experienced with a higher-rated issue. Securities offered through AFSI may not be suitable for all investors. Consult with your financial advisor for more information regarding the suitability of a particular investment. For further information on fixed income securities please refer to FINRA’s Smart Bond Investing at FINRA.org, MSRB’s Electronic Municipal Market Access at emma.msrb.org, or Investing in Bonds at investinginbonds.com.

DEFINITIONS OF TERMS Agency – Agency bonds are issued by Government Sponsored Enterprises (GSE), but are NOT direct obligations of the U.S. government. Common GSE’s are the Federal Home Loan Mortgage Corp. (Freddie Mac) Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Bank (FHLB). Beta: A measure of the risk arising from exposure to general market movements as opposed to company-specific factors. Betas in this report, unless otherwise noted, use the S&P 500 as the market benchmark and result from calculations over historic periods. A beta below 1.0, for example, can suggest the equity has tended to move with lower volatility than the broader market or, due to company-specific factors, has had higher volatility but generally low correlations with the overall market. Corporate Bonds – Are debt instruments issued by a private corporation. Non-Investment grade securities, commonly known as “high-yield” or “junk” bonds, are historically subject to greater risk of default, including the loss of principal and interest, than higher-rated bonds, which may result in greater price volatility than experienced with a higher-rated issue. Mortgage Backed Securities – Bonds are subject to prepayment risk. Yield and average lives shown consider prepayment assumptions that may not be met. Changes in payments may significantly affect yield and average life. Please contact your financial advisor for information on CMOs and how they react to different market conditions. Municipal Bonds – Interest income may be subject to state and/or local income taxes and/or the alternative minimum tax (AMT). Municipal securities subject to AMT assume a “nontaxable” status for yield calculations. Certain municipal bond income may be subject to federal income tax and are identified as “taxable”. Gains on sales/redemptions of municipal bonds may be taxed as capital gains. If the bonds are insured, the insurance pertains to the timely payment of principal (at maturity) and interest by the insurer of the underlying securities and not to the price of the bond, which will fluctuate prior to maturity. The guarantees are backed by the claims-paying ability of the listed insurance company. Treasury Securities – There is no guarantee as to the market value of these securities if they are sold prior to maturity or redemption. Price/Book: A financial ratio used to compare a company’s market share price, as of a certain date, to its book value per share. Book value relates to the accounting value of assets and liabilities in a company’s balance sheet. It is generally not a direct reflection of future earnings prospects or hard to value intangibles, such as brand, that could help generate those earnings. Price/Earnings: An equity valuation multiple calculated by dividing the market share price, as of a certain date, by earnings per share. Trailing P/E uses the share price divided by the past four-quarters’ earnings per share. Forward P/E uses the share price as of a certain date



divided by the consensus estimate of the future four-quarters’ EPS. Price/Sales: An equity valuation multiple calculated by dividing the market share price, as of a certain date, by the company’s sales per share over the most recent year. INDEX DEFINITIONS An index is a statistical composite that is not managed. It is not possible to invest directly in an index. Definitions of individual indices mentioned in this report are available on our website at ameriprise.com/legal/disclosures in the Additional Ameriprise research disclosures section, or through your Ameriprise financial advisor. DISCLAIMER SECTION Except for the historical information contained herein, certain matters in this report are forward-looking statements or projections that are dependent upon certain risks and uncertainties, including but not limited to, such factors and considerations as general market volatility, global economic and geopolitical impacts, fiscal and monetary policy, liquidity, the level of interest rates, historical sector performance relationships as they relate to the business and economic cycle, consumer preferences, foreign currency exchange rates, litigation risk, competitive positioning, the ability to successfully integrate acquisitions, the ability to develop and commercialize new products and services, legislative risks, the pricing environment for products and services, and compliance with various local, state, and federal health care laws. See latest third-party research reports and updates for risks pertaining to a particular security. This summary is based upon financial information and statistical data obtained from sources deemed reliable, but in no way is warranted by Ameriprise Financial, Inc. as to accuracy or completeness. This is not a solicitation by Ameriprise Financial Services, Inc. of any order to buy or sell securities. This summary is based exclusively on an analysis of general current market conditions, rather than the suitability of a specific proposed securities transaction. We will not advise you as to any change in figures or our views. Past performance is not a guarantee of future results. Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. AFSI and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Ameriprise Financial Services, Inc. Member FINRA and SIPC.

Documents

Before the Bell · 3/19/2020 · Americans, $50 billion in loans to the airline industry, and $150 billion for “severely distressed sectors” of the economy. However, developments