Economic and Market Review - BPASyear. All major indices were down sharply led by the Dow Jones Industrials (-23.2%) its steepest decline since 1987, S&P 500 (-19.6%) largest drop

Economic and Market Review Through Q2 2020

Economic Review – 1st Quarter 2020

• The U.S. economy entered 2020 riding the longest expansion on record and coming off a 2.3% growth rate in

2019, a recession seemed unlikely and then everything changed. The Coronavirus pandemic forced

Governments around the world to put swaths of national economies into an induced coma, artificially

maintaining their vital organs with the intention of awakening them gradually. (see charts on following pages)

• Congress passed the $2.3 Trillion Coronavirus Aid Relief and Economic Security (CARES) Act in late March

which is the largest relief package in history. The package provides loans and other disbursements to a wide

swath of the economy, including direct payments to individuals, expanded unemployment benefits, loans and

grants to large and small businesses, direct aid to states and grants to healthcare providers. (see charts on

following pages)

• The Federal Reserve unleashed much of its arsenal in an attempt to stem the impact of the Coronavirus, two

emergency 50 basis point rate cuts effectively pushing short-term rates to zero and cutting reserve requirements

for the 24 largest financial institutions. In addition, the Fed will purchase $500 Billion in Treasury Securities and

$200 Billion in MBS over the next few months.

• After 113 consecutive months of gains, the U.S. job market lost 701,000 jobs in March and the DOL reported

approximately 10 Million initial jobless claims over the last two weeks of the quarter. The unemployment rate

jumped to 4.4% with the expectation that will go much higher over the coming months.

• The inflation picture continues to remain subdued, headline CPI for November came in at 2.3% with the Core

PCE up slightly to 1.8% on a year over year basis. (see chart on following pages)

• Oil prices fell 67% with WTI ending the quarter at $20.48 per barrel, its lowest close since February of 2002.

Coronavirus triggered a major disruption in demand coupled with a price war between Saudi Arabia and Russia

caused the majority of the sell off. (see chart on following pages)

• Gold which many investors see as a safe haven rose a somewhat subdued 4.2% ending the quarter at $1,583 per

ounce. Gold has posted positive returns over the past 6 quarters.

• Factories across Europe and Asia cut output and jobs in March at the fastest pace since the global financial

crisis a sign the global economy has entered a deep freeze as Governments limit activity. China PMI rose to 50.1

in March from 40.3 in February as it attempts to restart its economy from its lockdown earlier this year.

2

3

Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Factset, S&P 500, J.P. Morgan Asset Management. Consumer spending (2019

annual): membership clubs, sports, amusement parks, campgrounds, movies, theaters, museums, libraries, casino gambling, purchased meals and

beverages, packaged tours, air and water transportation, hotels and motels, and select retail goods and services. Employment (January 2020): air

and water transportation, transit and ground passenger transportation, support activities for air and water transportation, arts, entertainment,

recreation, accommodation, food services and drinking places, and retail ex-food and beverage stores. Earnings (2019 operating): hotels restaurants

and leisure; airlines; select entertainment and travel booking companies; multiline and specialty retail; and textiles apparel and luxury goods.

Guide to the Markets – U.S. Data are as of March 31, 2020.

1

6

Consumer spending by industry Earnings contribution by industry2019, billions Contribution to 2019 S&P 500 operating earnings

Employment by industryJan. 2020, thousands

Retail ex-food & beverage

$2,711

Restaurants & bars $840

Entertainment $336 Transportation

$166

Hotels & tourism

$118

Total: $4,171 (19% of GDP)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Consumer spending


12,575

Restaurants & bars12,235

Entertainment 2,493 Transportation1,420

Hotels & tourism 2,095

Total: 30,817 (20% of payroll jobs)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Employment


$5.36

Restaurants & bars$1.38

Entertainment$1.05

Airlines & cruises$1.83

Hotels & tourism$1.08

Total: $10.71 (7% of operating earnings)

$0

$2

$4

$6

$8

$10

$12

2019 Earnings contribution

4

Global economic growth

Source: CBO, J.P. Morgan Asset Management; (Top and bottom right) BEA, Treasury Department.

2020 Federal Budget is based on the Congressional Budget Office (CBO) March 2020 Baseline Budget Forecast. CBO Baseline economic

assumptions are based on the Congressional Budget Office (CBO) January 2020 Update to Economic Outlook. Other spending includes, but is not

limited to, health insurance subsidies, income security and federal civilian and military retirement. Note: Years shown are fiscal years (Oct. 1 through

Sep. 30).


4

7Coronavirus Aid, Relief, and Economic Security Act Federal budget surplus/deficit

% of GDP, 1990 – 2030, 2020 CBO Baseline

Federal net debt (accumulated deficits)% of GDP, 1940 – 2030, 2020 CBO Baseline, end of fiscal year

20%

40%

60%

80%

100%

120%

'40 '50 '60 '70 '80 '90 '00 '10 '20 '30

-18%

-13%

-8%

-3%

2%

7%'90 '95 '00 '05 '10 '15 '20 '25 '30

CBO Baseline

2030: 97.8%

2019: 79.2%

2030: -5.5%2019:

-4.6%

JPMAM Forecast

2030: 110.8%

CBO Baseline

JPMAM Forecast 2030: -5.9%

2020: -13.6%Amount ($ bn) Measure

$290One-time stimulus checks amounting to $1,200 per

adult and $500 per child up to certain income limits

$260

Enhanced, expanded and extended unemployment

benefits, adding $600 per week to every

unemployment check for 4 months, expanding

program to cover contractors and self-employed and

extending program to 39 weeks from 26 weeks

$510

Loans to distressed businesses, cities and states.

Includes $29 billion for airlines, $17 billion for firms

deemed important for national security and $454

billion as backstop for loans to other businesses,

cities and states

$377

Small business relief, largely in the form of

“forgivable loans” for spending on payroll, rent and

utilities

$150 Direct aid to state and municipal governments

$180 Health-related spending

$516 Other spending and tax breaks

$2.283 trillion ~10.8% of GDP

5

Unemployment and wages

Source: BLS, FactSet, J.P. Morgan Asset Management.

CPI used is CPI-U and values shown are % change vs. one year ago. Core CPI is defined as CPI excluding food and energy prices. The Personal

Consumption Expenditure (PCE) deflator employs an evolving chain-weighted basket of consumer expenditures instead of the fixed-weight basket

used in CPI calculations.


2

3CPI and core CPI% change vs. prior year, seasonally adjusted

50-yr. avg. Jan. 2020 Feb. 2020

Headline CPI 3.9% 2.5% 2.3%

Core CPI 3.9% 2.3% 2.4%

Food CPI 3.9% 1.8% 1.8%

Energy CPI 4.4% 6.3% 2.8%

Headline PCE deflator 3.4% 1.8% 1.8%

Core PCE deflator 3.3% 1.7% 1.8%

-3%

0%

3%

6%

9%

12%

15%

'70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Recession

6

Inflation

Source: J.P. Morgan Asset Management; (Top and bottom left) EIA; (Right) FactSet; (Bottom left) Baker Hughes.

*Forecasts are from the March 2020 EIA Short-Term Energy Outlook and start in 2020. **U.S. crude oil inventories include the Strategic Petroleum

Reserve (SPR). Active rig count includes both natural gas and oil rigs. WTI crude prices are continuous contract NYM prices in USD.


2

6

Change in production and consumption of liquid fuels Price of oilProduction, consumption and inventories, millions of barrels per day WTI crude, nominal prices, USD/barrel

Production 2017 2018 2019 2020* 2021* Growth since '17

U.S. 15.7 17.9 19.5 20.9 20.8 32.8%

OPEC 37.4 37.3 35.2 34.2 34.5 -7.8%

Russia 11.2 11.4 11.5 11.6 11.5 2.8%

Global 98.1 100.8 100.6 102.1 102.4 4.4%

Consumption

U.S. 20.0 20.5 20.5 20.5 20.7 3.8%

China 13.6 14.0 14.5 14.6 15.4 13.4%

Global 98.7 100.0 100.8 101.1 102.9 4.2%

Inventory Change -0.6 0.8 -0.2 1.0 -0.4

U.S. crude oil inventories and rig count**Million barrels, number of active rigs

0

500

1,000

1,500

2,000

2,500

900

950

1,000

1,050

1,100

1,150

1,200

1,250

'13 '14 '15 '16 '17 '18 '19 '20

Inventories (incl. SPR) Active rigs

Jul. 3, 2008: $145.29

Feb. 12, 2009: $33.98

Jun. 13, 2014:

$106.91

Feb. 11, 2016: $26.21 Mar. 31,

2020: $20.48

$0

$20

$40

$60

$80

$100

$120

$140

$160

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Market Review – 1st Quarter 2020

• U.S. equities suffered a stunning blow in Q1 that few investors would have anticipated at the start of the

year. All major indices were down sharply led by the Dow Jones Industrials (-23.2%) its steepest decline

since 1987, S&P 500 (-19.6%) largest drop sine 2008 and the Nasdaq Composite (-14.2%) largest loss since

Q4 of 2018. (see chart on following pages)

• Volatility returned in a big way during the quarter with the CBOE VIX index, often referred to as the “fear

gauge” reaching a high of 82.69 on March 16th passing the peak reached during the financial crisis. The

Dow Jones Industrials dropped 32.4% over a 5 week period ending on March 23rd, followed by a sharp 3

day rally of 21.3% the largest since October of 1931. The VIX ended the quarter at 53.54 an increase of 289%

for the quarter. (see chart on following pages)

• International markets also suffered significant loses with the MSCI EAFE (-22.7%) and Emerging Markets

(-23.6%). The best market performers in U.S. Dollar terms included China (-10.2%) and Japan (-16.6%).

International stocks continued to display attractive valuations relative to their 25 year averages. (see chart on

following pages)

• All 11 S&P 500 sectors were down double digits in Q1 with the best performing sectors Technology (-11.9%)

Health Care and Consumer Staples (-12.7%). The worst performing sectors were Energy (-50.5%) and

Financials (-31.9%). (see table on following pages)

• Fixed income markets were mixed in Q1 with gains in Treasury debt, U.S. Aggregate Bond Index (+3.15%)

and Mortgage Backed Securities (+2.82%). Most credit sensitive sectors were negative as credit spreads

widened throughout the quarter with the weakest performing sectors being Convertibles (-12.95%) High

Yield (-12.68%) and Corporate Credit (-3.63%).

• The Treasury market experienced historically low rates during the quarter and ended the quarter near all

time low rates across all segments. The benchmark 10 year started the year at 1.92% dropping briefly below

.40% ending the quarter at .70%. After adjusting for inflation, the real yield on the 10 year remained

negative at -1.67%. (see chart on following pages)

• U.S. equities (S&P 500 Index) have experienced an annualized return of +9.0%, while U.S. fixed income

(Bbg Barclays Aggregate Index) returned an annualized +4.1% over the past 15 years. Over that same

period of time a diversified portfolio had an annualized rate of return of +6.6%. (see table on following pages)

7

8

Source: Compustat, FactSet, Federal Reserve, Standard & Poor’s, J.P. Morgan Asset Management.

Dividend yield is calculated as consensus estimates of dividends for the next 12 months, divided by most recent price, as provided by Compustat.

Forward price to earnings ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by consensus estimates for

earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on S&P 500 Index price

movement only, and do not include the reinvestment of dividends. Past performance is not indicative of future returns.


S&P 500 Price Index

Characteristic 3/24/2000 10/9/2007 2/19/2020 3/31/2020

Index Level 1,527 1,565 3,386 2,585

P/E Ratio (fwd.) 27.2x 15.7x 19.0x 15.4x

Dividend Yield 1.4% 1.9% 1.9% 2.4%

10-yr. Treasury 6.2% 4.7% 1.6% 0.7%

600

900

1,200

1,500

1,800

2,100

2,400

2,700

3,000

3,300

3,600

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

+106%

-49%

+101%

-57%

+401%

Dec. 31, 1996P/E (fwd.) = 16.0x

741

Mar. 24, 2000P/E (fwd.) = 27.2x

1,527

Oct. 9, 2002P/E (fwd.) = 14.1x

777

Oct. 9, 2007P/E (fwd.) = 15.7x

1,565

Mar. 9, 2009P/E (fwd.) = 10.3x

677

Mar. 31, 2020P/E (fwd.) = 15.4x

2,585

Feb. 19, 2020P/E (fwd.) = 19.0x

3,386

-24%

9

inflection points

Source: CBOE, FactSet, Standard & Poor’s, J.P. Morgan Asset Management.

Drawdowns are calculated as the prior peak to the lowest point.


4Major pullbacks since the Financial CrisisS&P 500 Price index

VolatilityVIX Index VIX Level

'08 Peak 80.9

Average 17.2

Latest 53.5

1,000

1,500

2,000

2,500

3,000

3,500

'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

8

18

28

38

48

58

68

78

88

'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

Aug. 25, 2015: -12.4%

Jul. 2, 2010: -16.0%

Oct. 3, 2011: -19.4%

Jun. 1, 2012: -9.9%

Jun. 24, 2013: -5.8%

Oct. 15, 2014: -7.4%

Jul. ’10:Flash Crash,

BP oil spill, Europe/Greece

Oct. ’11:U.S. downgrade,

Europe/periphery stress

Jun. ’12:Euro double

dip

Jun. ’13:Taper Tantrum

Oct. ’14:Global

slowdown fears, Ebola

Aug. ’15:Global

slowdown fears,

China, Fed uncertainty

Feb. 11, 2016:-13.3%

Feb. ’16:Oil, U.S.

recession fears, China

Feb. 8, 2018:-10.2%

Feb. ’18:Inflation,

trade, tech

Dec. 24, 2018:-19.8%

Dec. ’18:Rising

rates, trade, peak

growth

Mar. 31, 2020:-23.7%

Feb. ’20:Global

slowdown, COVID-19,

oil price collapse

10

Source: FactSet, MSCI, Standard & Poor’s, Thomson Reuters, J.P. Morgan Asset Management.

*Valuations refer to NTMA P/E for Europe, U.S., Japan and developed markets and P/B for emerging markets. Valuation and earnings charts use

MSCI indices for all regions/countries, except for the U.S., which is the S&P 500. All indices use IBES aggregate earnings estimates, which may differ

from earnings estimates used elsewhere in the book. MSCI Europe includes the eurozone as well as countries not in the currency bloc, such as

Norway, Sweden, Switzerland and the UK (which collectively make up 46% of the overall index). Past performance is not a reliable indicator of

current and future results.


Global earnings Global valuations EPS, local currency, next 12 months, Jan. 2006 = 100 Current and 25-year historical valuations*

20

40

60

80

100

120

140

160

180

200

220

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

Japan

Europe

U.S.

EM

16.33x 16.07x

14.57x

21.37x

15.04x

13.46x

12.08x

11.86x

1.78x

1.39x

0.0x

0.4x

0.8x

1.2x

1.6x

2.0x

2.4x

2.8x

3.2x

3.6x

4.0x

4.4x

4.8x

5.2x

5x

9x

13x

17x

21x

25x

29x

33x

U.S. DM Europe Japan EM

49x

Axis

Pri

ce

-to

-ea

rnin

gs

Pric

e-to

-bo

ok

Current

25-year range

25-year average

11

Source: FactSet, Russell Investment Group, Standard & Poor’s, J.P. Morgan Asset Management. All calculations are cumulative total return, not annualized, including dividends for the stated period. Since market peak represents period 10/9/07 – 3/31/20. Since market low represents period 3/9/09 – 3/31/20. Correlation to Treasury yields are trailing 2-year monthly correlations between S&P 500 sector price returns and 10-year Treasury yield movements. Foreign percent of sales is from Standard & Poor’s, S&P 500 2018: Global Sales report as of August 2019. Real Estate and Comm. Services foreign sales are not included due to lack of availability. NTM earnings growth is the percent change in next 12 months earnings estimates compared to last 12 months earnings provided by brokers. Forward P/E ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Buyback yield is net of share issuance and is calculated as last 12-months net buybacks divided by market cap. Dividend yield is calculated as the next 12-month consensus dividend divided by most recent price. Beta calculations are based on 10-years of monthly price returns for the S&P 500 and its sub-indices. *Communication Services (formerly Telecom) averages and beta are based on 5-years of backtested data by JPMAM. **Real estate NTM earnings growth is a 15-year average due to data availability. Past performance is not indicative of future returns.Guide to the Markets – U.S. Data are as of March 31, 2020.

Ener

gy

Finan

cials

Mat

erials

Indus

tria

ls

Cons. D

iscr

.

Technolo

gy

Com

m. S

ervic

es*

Real

Est

ate

Heal

th C

are

Cons. S

taple

s

Util

ities

S&P 5

00 In

dex

S&P weight 2.6% 10.9% 2.4% 8.2% 9.8% 25.5% 10.7% 3.0% 15.4% 7.8% 3.6% 100.0%

Russell Growth weight 0.1% 2.9% 1.2% 8.0% 14.1% 39.8% 11.7% 2.5% 15.1% 4.6% 0.0% 100.0%

Russell Value weight 5.4% 21.3% 4.2% 9.4% 5.2% 6.8% 8.6% 5.1% 15.5% 10.6% 7.8% 100.0%

1Q 2020 -50.5 -31.9 -26.1 -27.0 -19.3 -11.9 -17.0 -19.2 -12.7 -12.7 -13.5 -19.6

YTD -50.5 -31.9 -26.1 -27.0 -19.3 -11.9 -17.0 -19.2 -12.7 -12.7 -13.5 -19.6

Since market peak (October 2007)

-47.2 -7.1 38.7 74.9 222.5 294.6 48.8 70.6 212.0 176.1 117.3 115.3

Since market low (March 2009)

-3.4 407.1 230.4 380.6 646.6 726.9 184.3 532.5 403.0 287.1 280.3 381.2

Beta to S&P 500 1.39 1.25 1.21 1.21 1.09 1.06 0.95* 0.79 0.75 0.60 0.36 1.00 β

Correl. to Treas. yields 0.67 0.65 0.52 0.51 0.41 0.40 0.47 0.20 0.42 0.42 0.30 0.53 ρ

Foreign % of sales 51.3 30.1 56.8 43.8 34.0 58.2 44.7 - 38.5 32.7 - 42.9 %

NTM Earnings Growth -63.0% 4.0% 1.5% -0.9% 1.5% 9.3% 5.5%* 3.9% 7.5% 4.7% 3.2% 3.2%

20-yr avg. 12.1% 22.1% 19.3% 10.9% 15.2% 14.0% 10.1%* 7.7%** 9.5% 8.5% 4.7% 11.3%

Forward P/E ratio 45.0x 9.1x 15.3x 14.9x 19.9x 18.6x 15.6x 16.1x 13.9x 17.6x 16.9x 15.4x

20-yr avg. 17.0x 12.5x 14.0x 15.9x 17.8x 19.4x 18.2x* 15.7x 16.1x 16.8x 14.5x 15.5x

Buyback yield 0.7% 5.2% 2.5% 2.5% 2.2% 3.2% 1.6% -1.0% 2.1% 1.3% -2.1% 2.4%

20-yr avg. 1.5% -0.1% 0.7% 2.0% 2.4% 2.8% 1.2% -0.8% 1.9% 1.8% -0.9% 1.6%

Dividend yield 8.1% 3.3% 3.0% 2.6% 1.7% 1.6% 1.6% 4.0% 2.1% 3.3% 3.8% 2.4%

20-yr avg. 2.4% 2.3% 2.6% 2.2% 1.4% 1.0% 1.6%* 4.3% 1.8% 2.8% 3.9% 2.1%

We

igh

tD

ivR

etu

rn (

%)

EP

SP

/EB

bk

12

Yield curve

Source: BLS, FactSet, Federal Reserve, J.P. Morgan Asset Management.

Real 10-year Treasury yields are calculated as the daily Treasury yield less year-over-year core CPI inflation for that month except for March 2020

where real yields are calculated by subtracting out February 2020 year-over-year core inflation.


32 Nominal and real 10-year Treasury yields

Average

(1958 - YTD 2020) Mar. 31, 2020

Nominal yields 5.96% 0.70%

Real yields 2.30% -1.67%

Inflation 3.65% 2.37%

Sep. 30, 1981: 15.84%

Mar. 31, 2020: 0.70%

Mar. 31, 2020: -1.67%

-5%

0%

5%

10%

15%

20%

'58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18

Nominal 10-year Treasury yield

Real 10-year Treasury yield

13

Asset class returns

Source: Barclays, Bloomberg, FactSet, MSCI, NAREIT, Russell, Standard & Poor’s, J.P. Morgan Asset Management.

Large cap: S&P 500, Small cap: Russell 2000, EM Equity: MSCI EME, DM Equity: MSCI EAFE, Comdty: Bloomberg Commodity Index, High Yield:

Bloomberg Barclays Global HY Index, Fixed Income: Bloomberg Barclays US Aggregate, REITs: NAREIT Equity REIT Index, Cash: Bloomberg

Barclays 1-3m Treasury. The “Asset Allocation” portfolio assumes the following weights: 25% in the S&P 500, 10% in the Russell 2000, 15% in the

MSCI EAFE, 5% in the MSCI EME, 25% in the Bloomberg Barclays US Aggregate, 5% in the Bloomberg Barclays 1-3m Treasury, 5% in the

Bloomberg Barclays Global High Yield Index, 5% in the Bloomberg Commodity Index and 5% in the NAREIT Equity REIT Index. Balanced portfolio

assumes annual rebalancing. Annualized (Ann.) return and volatility (Vol.) represents period of 12/31/04 – 12/31/19. Please see disclosure page at

end for index definitions. All data represents total return for stated period. The “Asset Allocation” portfolio is for illustrative purposes only. Past

performance is not indicative of future returns.


6

1

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD Ann. Vol.

EM

EquityREITs

EM

Equity

Fixe d

Inc ome

EM

EquityREITs REITs REITs

Sma ll

Ca pREITs REITs

Sma ll

Ca p

EM

EquityCa sh

La rge

Ca p

Fixe d

Inc ome

La rge

Ca pREITs

3 4 .5 % 3 5 .1% 3 9 .8 % 5 .2 % 7 9 .0 % 2 7 .9 % 8 .3 % 19 .7 % 3 8 .8 % 2 8 .0 % 2 .8 % 2 1.3 % 3 7 .8 % 1.8 % 3 1.5 % 3 .1% 9 .0 % 2 2 .2 %

Comdty.EM

EquityComdty. Ca sh

High

Y ie ld

Sma ll

Ca p

Fixe d

Inc ome

High

Y ie ld

La rge

Ca p

La rge

Ca p

La rge

Ca p

High

Y ie ld

DM

Equity

Fixe d

Inc omeREITs Ca sh REITs

EM

Equity

2 1.4 % 3 2 .6 % 16 .2 % 1.8 % 5 9 .4 % 2 6 .9 % 7 .8 % 19 .6 % 3 2 .4 % 13 .7 % 1.4 % 14 .3 % 2 5 .6 % 0 .0 % 2 8 .7 % 0 .5 % 8 .3 % 2 2 .1%

DM

Equity

DM

Equity

DM

Equity

Asse t

Alloc .

DM

Equity

EM

Equity

High

Y ie ld

EM

Equity

DM

Equity

Fixe d

Inc ome

Fixe d

Inc ome

La rge

Ca p

La rge

Ca pREITs

Sma ll

Ca p

Asse t

Alloc .

Sma ll

Ca pComdty.

14 .0 % 2 6 .9 % 11.6 % - 2 5 .4 % 3 2 .5 % 19 .2 % 3 .1% 18 .6 % 2 3 .3 % 6 .0 % 0 .5 % 12 .0 % 2 1.8 % - 4 .0 % 2 5 .5 % - 14 .8 % 7 .9 % 18 .6 %

REITsSma ll

Ca p

Asse t

Alloc .

High

Y ie ldREITs Comdty.

La rge

Ca p

DM

Equity

Asse t

Alloc .

Asse t

Alloc .Ca sh Comdty.

Sma ll

Ca p

High

Y ie ld

DM

Equity

High

Y ie ld

EM

Equity

Sma ll

Ca p

12 .2 % 18 .4 % 7 .1% - 2 6 .9 % 2 8 .0 % 16 .8 % 2 .1% 17 .9 % 14 .9 % 5 .2 % 0 .0 % 11.8 % 14 .6 % - 4 .1% 2 2 .7 % - 15 .0 % 7 .8 % 17 .7 %

Asse t

Alloc .

La rge

Ca p

Fixe d

Inc ome

Sma ll

Ca p

Sma ll

Ca p

La rge

Ca pCa sh

Sma ll

Ca p

High

Y ie ld

Sma ll

Ca p

DM

Equity

EM

Equity

Asse t

Alloc .

La rge

Ca p

Asse t

Alloc .

La rge

Ca p

High

Y ie ld

DM

Equity

8 .1% 15 .8 % 7 .0 % - 3 3 .8 % 2 7 .2 % 15 .1% 0 .1% 16 .3 % 7 .3 % 4 .9 % - 0 .4 % 11.6 % 14 .6 % - 4 .4 % 19 .5 % - 19 .6 % 7 .2 % 17 .3 %

La rge

Ca p

Asse t

Alloc .

La rge

Ca pComdty.

La rge

Ca p

High

Y ie ld

Asse t

Alloc .

La rge

Ca pREITs Ca sh

Asse t

Alloc .REITs

High

Y ie ld

Asse t

Alloc .

EM

Equity

DM

Equity

Asse t

Alloc .

La rge

Ca p

4 .9 % 15 .3 % 5 .5 % - 3 5 .6 % 2 6 .5 % 14 .8 % - 0 .7 % 16 .0 % 2 .9 % 0 .0 % - 2 .0 % 8 .6 % 10 .4 % - 5 .8 % 18 .9 % - 2 2 .7 % 6 .6 % 14 .0 %

Sma ll

Ca p

High

Y ie ldCa sh

La rge

Ca p

Asse t

Alloc .

Asse t

Alloc .

Sma ll

Ca p

Asse t

Alloc .Ca sh

High

Y ie ld

High

Y ie ld

Asse t

Alloc .REITs

Sma ll

Ca p

High

Y ie ldComdty.

DM

Equity

High

Y ie ld

4 .6 % 13 .7 % 4 .8 % - 3 7 .0 % 2 5 .0 % 13 .3 % - 4 .2 % 12 .2 % 0 .0 % 0 .0 % - 2 .7 % 8 .3 % 8 .7 % - 11.0 % 12 .6 % - 2 3 .3 % 5 .3 % 10 .9 %

High

Y ie ldCa sh

High

Y ie ldREITs Comdty.

DM

Equity

DM

Equity

Fixe d

Inc ome

Fixe d

Inc ome

EM

Equity

Sma ll

Ca p

Fixe d

Inc ome

Fixe d

Inc omeComdty.

Fixe d

Inc omeREITs

Fixe d

Inc ome

Asse t

Alloc .

3 .6 % 4 .8 % 3 .2 % - 3 7 .7 % 18 .9 % 8 .2 % - 11.7 % 4 .2 % - 2 .0 % - 1.8 % - 4 .4 % 2 .6 % 3 .5 % - 11.2 % 8 .7 % - 2 3 .4 % 4 .1% 10 .0 %

Ca shFixe d

Inc ome

Sma ll

Ca p

DM

Equity

Fixe d

Inc ome

Fixe d

Inc omeComdty. Ca sh

EM

Equity

DM

Equity

EM

Equity

DM

EquityComdty.

DM

EquityComdty.

EM

EquityCa sh

Fixe d

Inc ome

3 .0 % 4 .3 % - 1.6 % - 4 3 .1% 5 .9 % 6 .5 % - 13 .3 % 0 .1% - 2 .3 % - 4 .5 % - 14 .6 % 1.5 % 1.7 % - 13 .4 % 7 .7 % - 2 3 .6 % 1.3 % 3 .4 %

Fixe d

Inc omeComdty. REITs

EM

EquityCa sh Ca sh

EM

EquityComdty. Comdty. Comdty. Comdty. Ca sh Ca sh

EM

EquityCa sh

Sma ll

Ca pComdty. Ca sh

2 .4 % 2 .1% - 15 .7 % - 5 3 .2 % 0 .1% 0 .1% - 18 .2 % - 1.1% - 9 .5 % - 17 .0 % - 2 4 .7 % 0 .3 % 0 .8 % - 14 .2 % 2 .2 % - 3 0 .6 % - 2 .6 % 1.0 %

2005 - 2019

Source: Morningstar Direct

14

Market Returns as of March 31, 2020

Asset Class 1 Month Qtr YTD

Annualized Calendar Years

1 Yr 3 Yr 5 Yr 10 Yr 2019 2018 2017 2016 2015

S&P 500 -12.35 -19.60 -19.60 -6.98 5.10 6.73 10.53 31.49 -4.38 21.83 11.96 1.38

Dow Jones Ind. Avg. -13.62 -22.73 -22.73 -13.38 4.42 6.86 10.00 25.34 -3.48 28.11 16.50 0.21

NASDAQ Composite -10.03 -13.95 -13.95 0.70 10.39 10.70 13.67 36.69 -2.84 29.64 8.87 6.96

Large Cap Stocks -13.21 -20.22 -20.22 -8.03 4.64 6.22 10.39 31.43 -4.78 21.69 12.05 0.92

Large Cap Growth Stocks -9.84 -14.10 -14.10 0.91 11.32 10.36 12.97 36.39 -1.51 30.21 7.08 5.67

Large Cap Value Stocks -17.09 -26.73 -26.73 -17.17 -2.18 1.90 7.67 26.54 -8.27 13.66 17.34 -3.83

Mid Cap Stocks -19.49 -27.07 -27.07 -18.31 -0.81 1.85 8.77 30.54 -9.06 18.52 13.80 -2.44

Mid Cap Growth Stocks -14.91 -20.04 -20.04 -9.45 6.53 5.61 10.89 35.47 -4.75 25.27 7.33 -0.20

Mid Cap Value Stocks -22.70 -31.71 -31.71 -24.13 -5.97 -0.76 7.22 27.06 -12.29 13.34 20.00 -4.78

Small Cap Stocks -21.73 -30.61 -30.61 -23.99 -4.64 -0.25 6.90 25.52 -11.01 14.65 21.31 -4.41

Small Cap Growth Stocks -19.10 -25.76 -25.76 -18.58 0.10 1.70 8.89 28.48 -9.31 22.17 11.32 -1.38

Small Cap Value Stocks -24.67 -35.66 -35.66 -29.64 -9.51 -2.42 4.79 22.39 -12.86 7.84 31.74 -7.47

International Stocks -13.35 -22.83 -22.83 -14.38 -1.82 -0.62 2.72 22.01 -13.79 25.03 1.00 -0.81

Emerging Markets -15.40 -23.60 -23.60 -17.69 -1.62 -0.37 0.68 18.42 -14.57 37.28 11.19 -14.92

US Real Estate -19.95 -24.39 -24.39 -16.74 -0.15 1.60 7.89 28.92 -4.03 9.84 7.56 2.14

Commodities -12.81 -23.29 -23.29 -22.31 -8.61 -7.76 -6.74 7.69 -11.25 1.70 11.77 -24.66

Bonds (US Aggregate) -0.59 3.15 3.15 8.93 4.82 3.36 3.88 8.72 0.01 3.54 2.65 0.55

3 month T-Bill 0.29 0.57 0.57 2.25 1.83 1.19 0.64 2.28 1.87 0.86 0.33 0.05

15

Disclosures

All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not include fees and expenses.

The Russell indexes are used for the domestic equity indexes. MSCI EAFE is used for international, MSCI EM is used for

emerging markets, DJ US Real Estate index for Real Estate, Bloomberg Commodity index for commodities, Bloomberg Barclays

US Aggregate Bond index for bonds and the ICE BofAML US 3M Treasury Bill index for the T-Bill. The S&P 500, DJIA, and

NASDAQ Composite returns shown in final table are total returns and include dividends.

Opinions, estimates, forecasts and statements of financial market trends that are based on current market conditions constitute our

judgment and are subject to change without notice. We believe the information contained on this report has been obtained from

reliable sources.

This material has been presented for informational purposes only and is not intended to provide and should not be relied upon for

financial, accounting, legal or tax advice.

This report is not intended as an offer or solicitation for the purchase or sale of any investment or security.

Past performance is not indicative of future returns. Investors should consult their advisor before investing.

NOT FDIC INSURED – NO BANK GUARANTEE – MAY LOSE VALUE

SOURCES: Morningstar, S&P, FRB, BLS, JP Morgan, Russell, NBER, Marketwatch.com and Goldman Sachs among others

noted on individual slides.

Documents

Economic and Market Review - BPASyear. All major indices were down sharply led by the Dow Jones Industrials (-23.2%) its steepest decline since 1987, S&P 500 (-19.6%) largest drop