CHIEF INVESTMENT OFFICE

Capital Market Outlook

February 5, 2024

All data, projections and opinions are as of the date of this report and subject to change.

IN THIS ISSUE MACRO STRATEGY 

Macro Strategy—Global Economy Landing Softly: Growing confidence in a lower interest Irene L. Peters, CFA®
rate and soft-landing scenario appears self-fulfilling, as financial conditions have eased enough Director and Senior Macro Strategy Analyst
to boost homebuilder sentiment, building permits for single-family homes, consumer
confidence, and equity benchmarks, all favorable early signals for the U.S. economic outlook. MARKET VIEW 
This, combined with more-resilient-than-expected emerging market economies and Matthew Diczok
government efforts to boost the flailing Chinese economy, has also raised confidence in a soft Managing Director and Head of CIO Fixed Income
landing at the global level. Strategy
The International Monetary Fund (IMF) now projects a stabilization in world gross domestic
product (GDP) growth in 2024, rather than a further slowdown, as in its October forecast. This THOUGHT OF THE WEEK 
is consistent with the cyclical Global Wave indicator compiled by BofA Global Research, which Kirsten Cabacungan
has troughed and appears poised to rise in 2024, as well as with our analysis showing a likely Vice President and Investment Strategist
rebound in global trade volume after 15 months of contraction. Even the Conference Board’s
Index of 10 Leading Economic Indicators (LEI) appears on a path to rebound following two MARKETS IN REVIEW 
years of recessionary-type declines.
Data as of 2/5/2024,
Market View—Fed Pivot May Provide A Soft Floor For Markets, But Slightly and subject to change
Increases Inflationary Risks: Federal Reserve (Fed) Chair Powell and the Federal Open
Market Committee (FOMC) are not afraid to pivot quickly and decisively when the situation
calls for it—nor should they be. Portfolio Considerations
With about 167 million people in the U.S. labor force, every 1% increase in the unemployment While we are optimistic that peak
rate would equate to about 1.7 million people out of work. If the Fed succeeds in achieving a rates and inflation are behind us, we
soft landing, that may be positive for risk assets as evidenced by the outperformance of are balanced versus our strategic
Equities after the mid-1990s soft landing. At the same time, while it is not our base case, in
benchmarks and fully invested across
this era, that marginally increases inflation risk.
Equities—with still a preference for
Thought of the Week—Five Charts on Small-caps: Small-caps staged a powerful rally at Large-caps and U.S. relative to the
the end of 2023. Despite some weakness so far this year, the case for Small-caps is building. rest of the world―and Fixed Income.
While the S&P 500 regained its all-time high, the Russell 2000 Index remains 18% below its In Fixed Income, our preference is to
own, which suggests that the opportunity for Small-caps to play catch up ahead continues. maintain a higher-quality positioning
Presidential election years have also been a historically positive backdrop for Small-cap across credit and sovereigns and,
outperformance. Further, relative valuations have cheapened to levels only last seen during the where appropriate, to favor slightly
Dot-com bubble, which was the start of a decade of Small-cap leadership. extending duration. We’ve identified
five mega themes for 2024 and
beyond that carry long-term
implications and influence on
economic growth, earnings potential,
and the cost of capital.

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Investment products:
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Please see last page for important disclosure information. 6334880 2/2024
MACRO STRATEGY
Global Economy Landing Softly
Irene L. Peters, CFA®, Director and Senior Macro Strategy Analyst
The expectation for a U.S. recession, or hard landing, has in large part been predicated on the Investing Implications
deep deterioration observed over the past two years in leading indicators of economic The prospect of moderate but
activity, such as the yield curve, the Conference Board’s LEI, and bank lending standards, in a
sustainable U.S. and global growth
pattern only seen in advance of past recessions. While the most aggressive Fed rate hikes in
with lower inflation and neutral
40 years were quick to reflect in these indicators, economic growth has surprised to the
interest rates is supportive of risk
upside. In fact, financial conditions have eased, and the U.S. economy actually reaccelerated
in the second half of 2023 as renewed fiscal stimulus boosted growth, while monetary assets.
contraction reined in inflation, enhancing real consumer spending.
The failure of leading indicators to date shouldn’t be too surprising, however, since
economic growth tends to respond to monetary policy changes with long and variable lags
of up to more than two years. The effect of rate hikes, for example, depends on a
multitude of factors that can be different from cycle to cycle, such as initial economic
conditions, the structure of the economy, the interest rate sensitivity of the business and
consumer sectors, the magnitude of imbalances or excesses in the economy, fiscal policy,
financial sector health, and energy market conditions. What’s more, the ultimate outcome
depends on whether, and how fast, monetary authorities overtighten—or not—relative to
the constant reordering of the economic backdrop.
During the current tightening cycle, evidence has accumulated on the side of a
lengthening lag that allows for a more gradual, smoother transition of the economy from
restrictive to easier monetary-policy conditions than in past cycles. This has much to do
with the nature and sources of the inflation spike (direct massive government support to
consumers, pandemic-related labor shortages, and related supply-chain problems), and
their quick reversal. It also has to do with the unusually loose zero-interest rate pandemic
policy, extraordinary pandemic fiscal stimulus, and ongoing high deficit spending in the
context of a fully employed economy, a unique set of circumstances that so far has
blunted the effect of interest-rate hikes on the economy.
For example, the Fed’s zero-interest rate policy combined with the eventual surge in
inflation, interest rates and nominal cash flows in the economy sharply reduced the
nonfinancial corporate sector’s net interest expense and its share of revenues over the
past three years. In fact, the drop in net interest expense accelerated when the Fed’s
aggressive rate hiking campaign began almost two years ago, as companies started to
earn interest at increasing rates on massively higher cash balances compared to
prepandemic levels, offsetting more and more of their fixed-rate interest expense. By Q3
2023, net interest payment was less than half its prepandemic level, according to the
Bureau of Economic Analysis (BEA), and at a 60-year low relative to corporate revenues
and profits. This unusual plunge in net interest payments helped keep profit margins
elevated, with positive effects on labor demand, business investment, and credit spreads.
At the same time, the household debt-to-asset ratio fell after the 2008-2009 Great
Financial Crisis, in Q3 2023 reaching its lowest level since about 1983, according to the
Federal Reserve Board. In addition, mortgages account for most household debt, and
consumers locked in rock-bottom mortgage rates, while government pandemic stimulus
substantially raised their nominal incomes and bank deposits. As a result, the ratio of
households’ debt-service payments to disposable income is lower than before the
pandemic and particularly lower compared to the 1980-2010 period. The situation is
similar even when taking into account automobile lease payments, rent payments,
homeowners' insurance, and property tax payments. Low financial obligations relative to
supercharged nominal personal income gains and skyrocketing net worth has helped to
boost consumer spending, business pricing power and profit margins, in turn keeping
credit spreads low and the economy in much better shape than had been expected given
the inflation shock and determined Fed policy response.
In fact, as noted above, recent data show that economic growth reaccelerated in 2023 to 2.5%
from 1.9% in 2022, according to the BEA, with GDP growth particularly strong in the second
half of 2023. Despite a large auto-strike-related drag of about 0.8 percentage points (pp), real

2 of 8 February 5, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

GDP surprised to the upside in Q4 with another above-trend 3.3% annualized gain following
a red-hot 4.9% increase in Q3. Growth was led by exceptional consumer spending strength
in November and December (about 6% annualized average month-to-month gains), setting
up Q1 2024 for a robust start as well. Other meaningful contributions to growth came from
exports as well as state and local government investment and spending.
According to the Beige Book 1 compiled for the January 30-31 Fed rate-setting meeting
based on information collected before January 8, 2024, the outlook for the economy has
improved as a result of easing financial conditions in recent months. Most Fed districts
indicated that growth expectations of their firms were positive, had improved, or both. At
the same time, nearly all districts cited one or more signs of a cooling labor market and
reported expectations for easing wage pressures in 2024.
With hiring and wages likely to slow and a rock-bottom saving rate, we expect consumer
spending adjusted for inflation to slow from its unsustainable 6% annualized pace of late
2023 to around 2% in the first half, which would still continue to support GDP growth.
Also supportive, housing-related data, which are highly sensitive to changes in interest
rates, have already started to benefit from a drop in the 30-year mortgage rate from about
8% in October to 7% in December. Homebuilders became much more optimistic about the
demand for new homes, with immediate effects on single-family building permits, which
increased in December to their highest level in 20 months, a positive for housing
construction and GDP growth.
Even the Conference Board LEI is showing signs of stabilization as a result of sharply
broader improvement across its components over the past three months. Its diminishing
declines since October, stock market gains, and favorable effects of lower interest rates on
housing bode well for a rebound in this indicator after an almost 24-month period of
recession-like deterioration.
Exhibit 1: The LEI Is On A Path To Recovery Back Into Expansion Territory.

% Composite Index of 10 Leading Economic Indicators (annualized month-to-month % change, advanced 5 months, red dotted line)
40 Composite Index of 10 Leading Economic Indicators (year/year % change, solid blue line)
30
20
10
0
-10
-20
-30
-40
1960 - Jan 1965 - Jan 1970 - Jan 1975 - Jan 1980 - Jan 1985 - Jan 1990 - Jan 1995 - Jan 2000 - Jan 2005 - Jan 2010 - Jan 2015 - Jan 2020 - Jan

Source: The Conference Board/Haver Analytics. Data as of January 30, 2024.

Better-than-expected and accelerating growth in Brazil, India and Southeast Asia’s
economies, together with Chinese government stimulus in support of a flailing economy,
have also raised confidence in a soft landing for the global economy. While still below the
long-term average of 3.5%, expectations for 2024 global growth were revised higher, from
2.9% to 3.1%, according to the IMF’s January 30, 2024 global outlook update. In large part
due to improved monetary and fiscal frameworks, emerging markets have proven quite
resilient, with stronger-than-expected growth and no funding crises or other financial
accidents that tended to be associated with rapidly rising U.S. interest rates and dollar
appreciation. Growing trade in local currencies between large emerging market countries
and a $60 per barrel price cap on Russian oil as a result of U.S. sanctions have also played
a role in their better-than-expected performance during the current tightening cycle. In
sum, high government spending, contained energy prices, declining inflation, and
improving overseas growth increase the likelihood of a U.S. soft landing. This is consistent
with evidence that the Global Wave cyclical indicator compiled by BofA Global Research
has troughed and is poised to rise in 2024.

1
A Federal Reserve System publication about current economic conditions and prospects across the 12 Federal
Reserve Districts prepared in advance of interest rate-setting meetings.

3 of 8 February 5, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

MARKET VIEW
Fed Pivot May Provide A Soft Floor For Markets, But Slightly
Increases Inflationary Risks
Matthew Diczok, Managing Director and Head of CIO Fixed Income Strategy Investing Implications
As Fed Chairman, Jerome Powell demonstrates a willingness and ability to quickly change If the Fed forestalls a recession for
tack if deemed desirable; these “Powell Pivots” can occur swiftly with important market a few years, that may be positive
and economic implications. Some criticize abrupt policy changes; we do not. As neither for risk assets, in our opinion.
John Maynard Keynes nor Winston Churchill apparently ever said, “When the facts change, I Small-cap Equities and Emerging
change my mind, sir. What do you do?” The Fed’s flexible approach to maintaining the Markets (EM) remain on our watch
economic expansion—as long as it does not engender too much inflation risk—is to be list, as both sectors finished 2023
welcomed and encouraged. with strong momentum and have
The Fed’s pivot toward easier monetary conditions is clear—and it is meaningful. In prior been largely consolidating so far in
meetings and speeches leading up to the FOMC's December 2023 meeting, Powell 2024. For Fixed Income, our
disavowed that now was the time to discuss rate cuts. This included a speech on preference is to slightly favor rate
December 1, 2023, when he commented that it would be “premature to conclude … that risk over credit risk. Investors
we have achieved a sufficiently restrictive stance, or to speculate on when policy might overweight cash should consider
ease.” 2 It was not premature for much longer; just 12 days later at the FOMC press extending duration prudently.
conference, Powell opined, “the question of when will it become appropriate to begin
dialing back … policy restraint … is clearly a discussion … for us at our meeting today.” At
that same FOMC meeting, he also said that “we’re not talking about altering the pace of
QT right now.” They might not have been talking about it technically, but they were
certainly “talking about talking about it;” according to the December FOMC meeting
minutes released in early January “several participants … suggested that it would be
appropriate for the Committee to begin to discuss … a decision to slow the pace of runoff
well before such a decision was reached.” 3 This was echoed a few days later by comments
from Dallas Fed President Logan—who was very involved with Fed balance sheets
activities when she was at the New York Fed—about when to consider slowing the
reduction in the Fed’s balance sheet, so-called quantitative tightening (QT); those
comments were a clear and intentional signal from the Fed that the topic was quickly
moving up on both its agenda and likely timetable. That was officially confirmed at the
January press conference when Powell said that “we did have some discussions on the
balance sheet, and we’re planning to begin in-depth discussions of balance sheet issues at
our next meeting.” 4
These abrupt changes—going from not debating either rate cuts or slowing balance sheet
reduction to discussing both within a month—did not go unnoticed by markets. From its
low in October 2023, the broad bond market is now up 8.5%, 5 and the stock market is up
20.1% 6—stellar returns for balanced portfolios over only a three-month time period.
Investment-grade credit spreads are below 1%, and 10-year AAA municipal bonds are
currently just slightly cheaper than some of the most expensive levels ever witnessed.
While some market returns may have been borrowed from the future by these strong
moves higher, if the U.S. does avoid a recession for several years that can be, historically, a
catalyst for higher asset prices over a longer period of time, in our opinion.
The Fed is trying to achieve what is referred to by economists as a “soft landing,” defined as
economic growth that is below trend (assumed to be about 2% real GDP) yet above 0%—
slowing but not negative. The prototypical soft landing occurred in the mid-1990s. After a
recession in 1990-1991, the Fed reduced the fed funds rate to 3% by 1992—at that point,
the lowest in the history of the data series. After the economic recovery took hold, the Fed

2
Federal Reserve, “Opening Remarks At a Fireside Chat at Spelman College, Atlanta, Georgia,” Jerome Powell.
December 1, 2023.
3
Federal Reserve, “Minutes of the Federal Open Market Committee December 12–13, 2023,” Released January 3,
2024.
4
Federal Reserve, FOMC January 2024 Press Conference, January 31, 2024.
5
Bloomberg, U.S. Aggregate Index. January 31, 2024.
6
Bloomberg, S&P 500 Total Return Index. January 31, 2024.

4 of 8 February 5, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

eventually doubled rates to 6% to slow inflation. Signs of a potential recession increased:
yield curves flattened dramatically; the LEI moved from strongly positive to negative; and
equity returns flattened out. The Fed pivoted correctly, however, cutting rates by 75 basis
points (bps) in three moves to 5.25% by January 1996. 7
This pivot forestalled a recession, allowed economic growth to continue, and extended the
1990s economic expansion to the longest on record at the time. Equity returns—which
had been muted for several years—performed exceedingly well over the following few
years. From 1990 to 1994, the S&P 500 returned 4.6% annually in terms of price returns.
Over the next three years, the S&P 500 returned an outstanding 115.7%, or 28.9%
annually. After an approximate 20% correction in 1998, Equities continued to move even
higher for the rest of the decade.
Exhibit 2: Fed Easing Cycles Can Be Macro and Market Positive But Do Slightly Increase Inflation Risk In This Environment.
2A) Fed Pause and Fine-Tuning Rates Ushered In An Economic Soft 2B) Historically, Higher Inflationary Era Usually Witness Multiple
Landing and Strong Equity Returns in 1990s. Inflation Spikes.
Fed Funds (Left Scale) S&P 500 (Indexed to 100, Right Scale) Index WWII Era (1940-) 70s Era (1968-) COVID Era (2020-)
9% 450 20%
8% 400
15%
7% 350
6% 300 10%
5% 250
4% 200 5%
3% 150
0%
2% 100
1% 50 -5%
T+0
T+8
T + 16
T + 24
T + 32
T + 40
T + 48
T + 56
T + 64
T + 72
T + 80
T + 88
T + 96
T + 104
T + 112
T + 120
T + 128
T + 136
T + 144
T + 152
T + 160
T + 168
T + 176
T + 184
T + 192
T + 200
T + 208
T + 216
0% -
Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98

Exhibit 2A) Sources: Bloomberg; Federal Reserve. Federal funds rate and S&P 500 Index, January 1990 to June 1998. Exhibit 2b) Sources: Bloomberg; Bureau of Labor Statistics. T + [X] refers the Xth
month after January of each respective year (1940, 1968, 2020.). Data as of 2023. Past performance is no guarantee of future results. Please refer to index definitions at the end of this
report. It is not possible to invest directly in an index.
While no two cycles are the same, we believe that the past era may be instructive. Risk is
always two-sided, and being too defensive with regard to macroeconomic risk during an
extended expansion may reduce return potential. The Global Wealth & Investment
Management Investment Strategy Committee is therefore closely looking at signs of a
durable expansion aided by Fed policy while monitoring cross-asset valuations carefully.
Both the market and BofA Research expect that the high inflation era is behind us and think
consumer price inflation will be muted and close to the Fed’s target going forward. The
Chief Investment Office completely agrees. Easier policy however, by definition, does
increase inflationary risk, all things being equal. We continue to caution that high inflationary
episodes usually have multiple spikes. In the unexpected event that inflation is resurgent, a
too-dovish Fed prioritizing employment gains over price stability would be the most likely
culprit—and, historically, that has often been a central bank’s policy error: easing monetary
policy conditions before inflation is finally snuffed out, allowing it to reignite. This is
definitely not a major concern at the moment but one on our potential watchlist.
In terms of asset classes and portfolio positioning, we expect a continued rotation within
equity markets; Small-cap Equities and EMs remain on our watch list. Both sectors finished
2023 with strong momentum and have been largely consolidating so far in 2024. For Fixed
Income, our preference is to slightly favor rate risk over credit risk and highlight areas of
particular expensiveness such as municipals, although they have cheapened somewhat
recently on more new issue supply. Our tilts are very measured, and we continue to think
that investors—especially those that are overweight cash or excessively short their duration
targets—should look to extend duration in a prudent manner, as nominal and real rates are
still at attractive levels relative to the last 20 years.

7
Bloomberg, Federal Reserve, Fed Funds Rate, S&P 500 Index, Conference Board Leading Economic Index. January
1990 to January 1996.

5 of 8 February 5, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

THOUGHT OF THE WEEK
Five Charts On Small-Caps
Investment Implications
Kirsten Cabacungan, Vice President and Investment Strategist
Small-caps staged a powerful rally at the end of 2023. Despite some weakness so far this Given favorable valuations, Small-
year, the case for Small-caps is building. caps could be the leaders of the
next decade. We see tailwinds
Five charts for more context… forming for the cycle to turn more
positive for Small-caps ahead.
The Cycle Could Be Turning Up For Small-Caps…
Small-caps rallied at the end of 2023, but there could be more untapped ... the Russell 2000 Index is still 18% below its all-time high, even as the S&P
potential... 500 broke through its own peak.
Cumulative Price Return Since Oct 27, 2023 Russell 2000 Cumulative Price Return Since Nov 8, 2021
30% 0%
S&P 500 When S&P 500 hit a
25% -5% new all-time high
Russell 2000
-10%
20%
-15%
15%
-20%
10%
-25%
5% -30%
0% -35%
Oct-23 Nov-23 Dec-23 Jan-24 Nov-21 May-22 Nov-22 May-23 Nov-23
Source: Bloomberg. Data from recent S&P 500 low on October 27, 2023 to January 31, 2024. Source: Bloomberg. Data from Russell 2000 all-time high on November 8, 2021 to January 31, 2024.

Relative valuations show Small-caps are historically cheap versus Large-caps. Small-cap outperformance has happened in cycles. A decade of Small-cap
leadership followed the last time relative valuations were at these levels.
Relative Forward Price/Earning: Russell 2000 vs. Russell 1000, 1985-2023 3-year Rolling Relative Total Returns, Russell 2000 minus S&P 500
1.4 Small vs. Large 80%
1.3 Average 60%
1.2 40%
1.1 20%
1.0 0%
0.9 -20%
0.8 -40%
0.7 -60%
0.6 -80%
0.5 -100%
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023

1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
Source: BofA Global Research. Data as of December 31, 2023. Source: Bloomberg. Data as of January 31, 2024.

Election years tend be a positive backdrop for Small-cap performance. The Russell 2000 outperformed the S&P 500 in eight of the last 10 presidential election
years. Small-caps have seen positive excess returns relative to Large-caps after the November presidential election.
Average Index Price Return (Last 10 Election Cycles Since 1981)
30% S&P 500 Presidential Election Year (Left Scale) Russell 2000 Presidential Election Year (Left Scale) 100%

25% S&P 500 All Other Years (Left Scale) Russell 2000 All Other Years (Left Scale) 90%
Hit Rate for Small-cap Outperformance in Presidential Election Year (Right Scale)
20% 80%

15% 70%

10% 60%

5% 50%

0% 40%
Start of Year through 1st Tues in Nov Full Year 3 months After 1st Tues in Nov 6 months After 1st Tues in Nov 12 months After 1st Tues in Nov

Note: First Tuesday in November represents the first Tuesday following the first Monday, which is the designated date of Presidential Elections. Sources: Chief Investment Office; Bloomberg.
Data covers the last 10 elections cycles since 1981 through 2020. Past performance is no guarantee of future results. Please refer to index definitions at the end of this report. It is not
possible to invest directly in an index.

6 of 8 February 5, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

MARKETS IN REVIEW

Equities
Total Return in USD (%) Economic Forecasts (as of 2/2/2024)
Current WTD MTD YTD Q4 2023A 2023A Q1 2024E Q2 2024E Q3 2024E Q4 2024E 2024E
DJIA 38,654.42 1.4 1.3 2.6 Real global GDP (% y/y annualized) - 3.1* - - - - 2.8
NASDAQ 15,628.95 1.1 3.1 4.1 Real U.S. GDP (% q/q annualized) 3.3 2.5 1.0 1.0 1.5 1.5 2.1
S&P 500 4,958.61 1.4 2.3 4.1
CPI inflation (% y/y) 3.2 4.1 2.9 2.9 2.6 2.4 2.7
S&P 400 Mid Cap 2,767.15 0.2 1.3 -0.4
Core CPI inflation (% y/y) 4.0 4.8 3.6 3.1 3.2 3.0 3.2
Russell 2000 1,962.73 -0.8 0.8 -3.1
Unemployment rate (%) 3.8 3.6 3.8 4.0 4.1 4.2 4.0
MSCI World 3,247.64 1.0 1.3 2.5
Fed funds rate, end period (%) 5.33 5.33 5.38 5.13 4.88 4.63 4.63
MSCI EAFE 2,223.18 0.0 -1.1 -0.5
MSCI Emerging Markets 988.21 0.3 1.3 -3.4 The forecasts in the table above are the base line view from BofA Global Research. The Global Wealth & Investment
Management (GWIM) Investment Strategy Committee (ISC) may make adjustments to this view over the course of the
Fixed Income† year and can express upside/downside to these forecasts. Historical data is sourced from Bloomberg, FactSet, and
Total Return in USD (%) Haver Analytics. There can be no assurance that the forecasts will be achieved. Economic or financial forecasts are
Current WTD MTD YTD inherently limited and should not be relied on as indicators of future investment performance.
A = Actual. E/* = Estimate.
Corporate & Government 4.58 0.66 -0.36 -0.59
Sources: BofA Global Research; GWIM ISC as of February 2, 2024.
Agencies 4.54 0.29 -0.32 -0.03
Municipals 3.32 0.94 0.34 -0.17
U.S. Investment Grade Credit 4.67 0.65 -0.38 -0.66 Asset Class Weightings (as of 1/9/2024) CIO Equity Sector Views
International 5.18 0.58 -0.33 -0.50 CIO View CIO View
High Yield 7.76 0.10 0.04 0.03 Asset Class Underweight Neutral Overweight Sector Underweight Neutral Overweight
90 Day Yield 5.36 5.35 5.36 5.33 Equities
neutral yellow

    full overweight green

2 Year Yield 4.36 4.35 4.21 4.25 Slight over weight green
Energy    
U.S. Large cap    
Healthcare
Full overweight green

   
10 Year Yield 4.02 4.14 3.91 3.88 Slight over weight green

U.S. Mid cap     neutral yellow

30 Year Yield 4.22 4.37 4.17 4.03 neutral yellow Utilities    

U.S. Small-cap    
Slight underweig ht orange
Consumer Neutral yellow

International Developed        
Commodities & Currencies Neutral yellow
Staples
Emerging Markets    
Total Return in USD (%) Information Neutral yellow

   
Neutral yellow

Fixed Income     Technology

Commodities Current WTD MTD YTD
Bloomberg Commodity 223.04 -2.0 -1.9 -1.5 U.S. Investment- slight over weight green

    Communication Neutral yellow

grade Taxable Services

   
WTI Crude $/Barrel†† 72.28 -7.3 -4.7 0.9 neutral yellow

International     Neutral yellow

Gold Spot $/Ounce†† 2039.76 1.1 0.0 -1.1 Slight underweig ht orange
Industrials    
Global High Yield Taxable     Neutral yellow

Total Return in USD (%) Financials    

U.S. Investment Grade neutral yellow

    slight underweig ht orange

Prior Prior 2022 Tax Exempt Materials    

Currencies Current Week End Month End Year End
Slight underweig ht orange

U.S. High Yield Tax Exempt

slight underweig ht orange

    Real Estate    
EUR/USD 1.08 1.09 1.08 1.10 Alternative Investments* Consumer Underweight red

USD/JPY 148.38 148.15 146.92 141.04

Neutral

   
Hedge Funds Discretionary
USD/CNH 7.21 7.19 7.19 7.13 Private Equity Neutral

Real Estate Neutral

S&P Sector Returns Tangible Assets / Neutral

Commodities
Consumer Discretionary 3.8% Cash
Consumer Staples 2.2%
*Many products that pursue Alternative Investment strategies, specifically Private Equity and Hedge Funds, are available
Healthcare 2.0%
only to qualified investors. CIO asset class views are relative to the CIO Strategic Asset Allocation (SAA) of a multi-asset
Industrials 1.9%
portfolio. Source: Chief Investment Office as of January 9, 2024. All sector and asset allocation recommendations must be
Communication Services 1.6%
considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all
Financials 0.9%
recommendations will be in the best interest of all investors.
Information Technology 0.8%
Materials 0.8%
Utilities 0.4%
Real Estate -0.5%
Energy -0.9%
-2% -1% 0% 1% 2% 3% 4% 5%

Sources: Bloomberg; Factset. Total Returns from the period of

1/29/2024 to 2/2/2024. †Bloomberg Barclays Indices. ††Spot price
returns. All data as of the 2/2/2024 close. Data would differ if a
different time period was displayed. Short-term performance shown
to illustrate more recent trend. Past performance is no guarantee
of future results.

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Index Definitions
Securities indexes assume reinvestment of all distributions and interest payments. Indexes are unmanaged and do not take into account fees or expenses. It is not possible to invest
directly in an index. Indexes are all based in U.S. dollars.
S&P 500 Index is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.
S&P 500 Total Return Index is the investment return received each year, including dividends, when holding the S&P 500 index.
Conference Board’s Index Leading Economic Indicators (LEI) is a predictive variable that anticipates (or “leads”) turning points in the business cycle by around 7 months.
Small-cap/Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index.
Russell 1000 Index is a stock market index that tracks the highest-ranking 1,000 stocks in the Russell 3000 Index, which represent about 93% of the total market capitalization of that index.
Bloomberg U.S. Aggregate Index is a broad base, market capitalization-weighted bond market index representing intermediate term investment grade bonds traded in the United States.

Important Disclosures
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potential but also higher loss potential. Changes in economic conditions or other circumstances may adversely affect your investments. Before you invest in alternative investments, you should
consider your overall financial situation, how much money you have to invest, your need for liquidity, and your tolerance for risk.
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