1

IC GLOBAL MACRO & ASSET ALLOCATION OUTLOOK – short deck

MERIT CAPITALWEALTH MANAGEMENT

HANS HEYTENSHead of Research/Portfolio manager

MERIT CAPITALWebsite: www.meritcapital.euMail: hans.heytens@meritcapital.beTel: +32 50 47 10 92

Mobile: +32 486 71 85 30

TAA HOUSE VIEW – KEY VIEWSTAA – House View

15/11/2019 2

▪ Geopolitiek ▪ Interne marktindicatoren: trend, interne

marktbreedte, risico-relaties, positioneringen,…▪ Financiële condities▪ Industriële green shoots: China manufacturing,

ISM manufacturing,…▪ Consument▪ Op meerderheid indicatoren nog geen recessie-

alarm.▪ Monetaire politiek: > 30 banken verlagen rente▪ Fiscale politiek:▪ Winstcyclus: beter dan verwacht, beat rate,

revisies,…➔ leidende indicatoren moeten nu beteren om geen winstval te kennen in 2020.

▪ Relatieve waarderingen: goedkoop

▪ Geopolitiek▪ Economie: groeivertraging

▪ Vertraging in industriële en dienstensector▪ Wereldwijde arbeidsmarkten▪ US arbeidsmarkt vertraagt▪ Wereldwijde export nog geen verbetering

▪ Recessie-alarm op bepaalde indicatoren▪ Winstonzekerheid: negatieve winstgroei momenteel die

dringend moet verbeteren. ▪ Absolute waarderingen: duur versus geschiedenis in bepaalde

regio’s.

TAA HOUSE VIEW – GLOBAL SECTORSTAA – House View

15/11/2019 3

10 0 % 50 % 2 5% 2 5%

GICS SECTORS

MULTI-FACTOR SECTOR

EQUITY DASHBOARDT1 T2 T3 T4 MRM DIV VAL

BR

EA

DT

H

TOT7-11-

19

TOT CHGRMO

M

RMOM

1-3m

RMOM

12mST LT

Utilities x x 1,9 75 1 1 0 3 8 2 2 4

Real Estate x 74 2 2 0 2 8 1 4 6

Financials x 83 3 3 0 3 2 8 8 1

Communication -2,5 2,2 62 4 4 0 3 7 3 5 6

Industrials x 1,5 82 5 5 0 1 1 5 9 9

Staples 1,4 74 6 6 0 9 11 4 2 5

Discretionary 1,3 73 7 7 0 6 4 7 7 8

Health Care 71 8 8 0 9 5 10 1 9

Materials 78 9 9 0 8 3 9 10 3

Technology 2,1 72 9 9 0 6 5 6 6 11

Energy 2,0 42 11 11 0 11 8 11 11 2

POTENTIAL TRADE SIGNALS

ST M OM EN T UMLT M EA N R EVER SIONABSOLUTE TREND

LT

TREND

SIGNALS

RELATIVE QUANT RANKINGS

SECTOR VIEW & HISTORISCHE PERFORMANCE SECTOR QUANT MODEL

15/11/2019 4

Financiële condities

Industriële economische indicatoren, wereldwijde Arbeidsmarkten, handel,

Kredietcyclus VS: plotse terugval in de vraag

Liquiditeitscyclus (geld cyclus)

Onzekerheid te extreem + Trump put? + onzekerheid gedaald over de laatste maanden + globalisatie is niet dood!

Onzekerheid hoog op korte termijn en volatiel. ..

Trend & marktbreedte positief

Bepaalde marktrelaties worden beter.

Nog steeds veel angst in de markt.

> 30 centrale banken verlagen wereldwijd de rente.Fed: indicatie van hold-modus (lichte verbetering)

Fiscale stimuli op komst in het Westen?Massale fiscale stimuli in bepaalde Aziatische landen

Recessie op onmiddellijk risico hoger dannormaal maar onvoldoende hoog in de VSwegens sterke arbeidsmarkt,consumentenmarkt en huizenmarkt.

Absolute waarderingen fair versus het verleden, maar duurversus negatieve winstgroei.

Relatieve waarderingen versus obligaties en cash enormaantrekkelijk (TRINA?)

GEOPOLITICS

15/11/2019 5

Verslechtering Verbetering

HONG KONG CLASHES

US-CHINA TRADE

US-EUROPE TRADE

HARD BREXIT

TRUMP IMPEACHMENT

OIL TENSIONS

TAA GLOBAL MACRO - GEOPOLITICS

USMCA RATIFICATION

GLOBALISATIE IS NIET DOOD!

• VS- JAPAN

• MERCUSOR

• CHINA OPENT ZICH VERDER

o INDEX INCLUSIESo FDI

• EMERGING ASIA OPENT ZICH VERDER

o Intra Asean handelsakkoordeno FDI-hervormingeno Arbeidshervormingeno BelastinghervormingenUS DEMCOCRAT WINNING

Real Clear Politics Average: Warren: 50,4 – Trump 43,1

GEOPOLITICS

15/11/2019 6

Bron: Merit Capital Macro, Bloomberg chart

TAA GLOBAL MACRO - GEOPOLITICS

Record global uncertainty at 325 = 3,25X than normal (100 level)

GEOPOLITICS

15/11/2019 7

Bron: Merit Capital Macro, Google

TAA GLOBAL MACRO - GEOPOLITICS

Record global uncertainty at 325 = 3,25X than normal (100 level)

Google trend: “recession”

RISK ON/OFF

15/11/2019 8

Source: Merit Capital Macro

TAA GLOBAL MACRO – MARKET INDICATORS: DASHBOARD (risk-on/off)

▪ Trends: positief op korte en lange termijn

▪ Overbought? : weinig overbought signalen behalve op heel korte termijn

▪ Marktbreedte: positief. Sterke impuls wereldwijd. New highs is positief.

▪ Economische modellen zijn wat verbeterd: verbetering in credit spreads enOECD indicatoren in Azië verbeteren.

Last Update

REGIONAL EQUITY

SHORT TERM PRICE TREND TIMING MODELS

20-week % rate of change in price

price versus 20-week moving average

MACD (12W,26W) versus signal line (9W)

total trend signal

SHORT TERM PRICE BREADTH

% of stocks > 10 day moving average

% of stocks > 50-day moving average

SHORT TERM PRICE OVERBOUGHT (z-score)

short term ob/os (price vs. 50d moving average)

Last Update

REGIONAL EQUITY

LONG TERM PRICE TREND TIMING MODELS

10-month rate of change

price versus 10-month sma

MACD (12w,26w)

MACD (12M,26M) versus signal line (9M)

total trend signal

LONG TERM PRICE BREADTH% of stocks > 200 day moving average

Global index price breadth (% bullish countries)

LONG TERM PRICE OVERBOUGHT (z-score)

long term ob/os (price vs. 50w moving average)

REGIONAL EQUITY

LONG TERM RELATIVE PRICE TREND Relative trend vs. world (1y)

Relative trend vs. Europe (1y)

LONG TERM ECONOMIC TIMING MODELS

Baa credit spread model (100d ma slope)

Conference board LEI model (6m chg)

OECD leading indicator model

EM EX CHINA CHINA EQUITYGLOBAL EQUITY

- ++ - + - + -

50%

IN IN IN IN IN IN

IN

5/11/2019 5/11/2019 5/11/2019 5/11/2019 5/11/2019 5/11/2019

70%

+ -

63% 75%

+

GLOBAL EQUITY US EQUITY EMU EQUITY UK EQUITY JAPAN EQUITY

+

+

0,8

IN IN IN

78% 70%

- + - + - + - +

67%

-

IN IN

- + - + - + - + -

- 58%

68% 70% 84% 70% 91% - 45%

US EQUITY EMU EQUITY

+

IN

70% 69% 74% 69% 48%

UK EQUITY JAPAN EQUITY

- + - + - + - + -

- + - + - + - + - + - + - +

- + - +

- +

CHINA EQUITYGLOBAL EQUITY US EQUITY EMU EQUITY UK EQUITY JAPAN EQUITY EM EX CHINA

- + - + - + - + - + - +

5/11/2019 5/11/2019 5/11/2019 5/11/2019 5/11/2019 5/11/2019

- - +

EM EX CHINA CHINA EQUITY

- + -

1,0

- + - + - + - + -

IN

- + - + - + - + -

- + - + - +

+ - + - +

+ - + - +

50%

RISK ON/OFF

15/11/2019 9

Source: Merit Capital Macro

TAA GLOBAL MACRO – MARKET INDICATORS: DASHBOARD (risk-on/off)CROSS-ASSET RELATIONSHIPS - N +

ACWI Equal Weight divergence

ACWI Small Cap divergence

ACWI Ex-USA divergence

Dow Theory: Transports divergence

global cyclicals/defensives

Global discretionary/staples divergence

Global luxury divergence

Dr. Copper Price Action

Gold vs. Equity Price Action

Emerging FX Price Action

Dollar index price action for equities

AUD/CHF price action

Large US High yield price divergence vs IG

Large US HY credit spread divergence

Large EM Sov spread divergence vs. Global equity

Large EM HY spread divergence vs. Global equity

- N +

G7 Forex volatility

Emerging Forex volatility

DB Global Risk Aversion

Citi Global Risk Aversion

Citi EM Macro Risk Aversion

VOL, STRESS & RISK

Correlation & dispersion

FED rate predicting future LT vol

3M ROC in VIX signal

VIX trend

RISK POSITIONING (what they have actually do ne...)- N +

Retail: Investor Movement Index

CNN Fear & Greed Index

Investors: CBOE equity put/call Focus on 50 dma not on daily. No extremes yet.

Global risk flows Exaggerated flows to bonds? First equity inflows visible

Global asset allocators Bullish in absence of rrecession

mutual funds: state street global Bullish in absence of rrecession. Still so scared.

mutual funds: state street US

mutual funds: state street EUR need second check

mutual funds: state street Asia

Speculative funds Turned long again. No extremes.

SENTIMENT (what they might perhaps be do ing...)- N +

US Retail: AAII Bull/Bear ratio AII moving average finally turning higher. Pointed to extreme bearishness last.

US Retail: Conference board households Retail resisting new highs

EUR Retail: Sentix SX5E 6M expect.

EUR Retail: Dax SX5E 6M expect.

EUR institutional: Euro Stoxx 50 expectations

BUSINESS CYCLE

15/11/2019 10

Bron: Merit Capital Macro

TAA GLOBAL MACRO – GLOBAL BUSINESS CYCLE INDICATORS:DASHBOARD

BUSINESS CYCLE INDICATORS

STRUCTURAL --- N +++ --- N +++ --- N +++ --- N +++STRUCTURAL

DEMOGRAPHICS . . . . . . .

PRODUCTIVITY . . .

GOVERNMENT DEBT . . . . . .

CORPORATE DEBT . . . . . .

HOUSEHOLD DEBT . . . .

BUSINESS CYCLE --- N +++ --- N +++ --- N +++ --- N +++GROWTH & INFLATION

REAL GDP TREND .

CONSENSUS ECO FORECAST TREND ▼ ▼ ▼ . ▼

INFLATION OUTLOOK .

FINANCIAL CONDITIONS

Financial conditions . ▲ . .

ECONOMIC INDICATORS

Composite indicators . . . . .

Economic activity - soft data . .

Surprises ▲ ▲ .

Manufacturing ▲ ▲ ▲ ▲

Services . . .

Economic activity - hard data . . . . .

external sector - soft leads . .

External sector - hard date ▼ . . . .

Labour market ▼ . . . .

Consumer health . .

Consumer spending - soft data . . .

Consumer spending - hard data . . . .

Housing . . .

CREDIT CYCLE

Corporate debt service .

Household debt service . .

Credit impulse . .

Private credit conditions - demand ▼

Private credit conditions - supply .

bonds defaults & loan delinquencies . .

LIQUIDITY CYCLE

Real money growyh . . .

Excess liquidity .

GLOBAL UNITED STATES EUROZONE CHINA

GLOBAL UNITED STATES EUROZONE CHINA

BUSINESS CYCLE

15/11/2019 11

Bron: Merit Capital Macro

TAA GLOBAL MACRO – GLOBAL BUSINESS CYCLE INDICATORS: financial conditions

Financiële condities (kredietpremies, geldmarkt stress, CDS prijzen,…) voorlopig gunstig…

BUSINESS CYCLE

15/11/2019 12

Bron: Merit Capital Macro

TAA GLOBAL MACRO – GLOBAL BUSINESS CYCLE INDICATORS: composite

Het slechte nieuws:

▪ Wereldgroei vertraagt nog steeds….▪ Terugval in aantal landen met stijgende

OECD-indicator…▪ Goldman Sachs Activity indicator blijft

dalen…

BUSINESS CYCLE

15/11/2019 13

Bron: Merit Capital Macro

TAA GLOBAL MACRO – GLOBAL BUSINESS CYCLE INDICATORS: composite

▪ Wereldwijd stijgt het aantal landen met een oplopende werkloosheid…

▪ In maar liefst 60% van de 19 landen die we volgen, stijgt de werkloosheid…

▪ Centrale banken verlagen de rente niet zomaar…

BUSINESS CYCLE

15/11/2019 14

Bron: Merit Capital Macro

TAA GLOBAL MACRO – GLOBAL BUSINESS CYCLE INDICATORS:

Het goede nieuws:

▪ Wereldwijde groeiverwachtingen stabiliseren voor het eerst….

▪ Industriële indicatoren lichte stabilisatie voor het eerst…

Maar export blijft afzien. Nood aan een handelsakkoord.

countries nov/18 dec/18 jan/19 feb/19 mrt/19 apr/19 mei/19 jun/19 jul/19 aug/19 sep/19 okt/19

United States 2,5 -0,5 2,2 1,7 0,4 -1,5 -1,4 -2,2 -0,6 0,0 -1,8

Canada 3,4 -1,2 4,6 3,0 4,7 3,4 8,0 -1,5 -3,1 -0,5 -0,5

Germany -0,2 1,3 1,7 2,9 2,9 -0,2 -0,4 -0,5 0,8 -0,8

France 3,2 0,7 5,6 7,1 6,1 3,2 11,9 1,9 1,0 5,0

Japan 0,1 -3,9 -8,4 -1,2 -2,4 -2,4 -7,8 -6,6 -1,5 -8,2 -5,2

Australia 21,5 16,5 16,2 14,7 11,9 16,7 17,1 15,3 15,6 10,1

New-Zealand 5,3 -4,0 1,6 5,9 16,7 10,4 7,3 1,7 -7,3 2,6 5,1

Brazil 24,8 9,7 5,5 -8,6 -8,5 -5,1 7,3 -6,4 -15,3 -9,7 -5,2 -16,8

Mexico 2,9 4,4 6,2 3,8 -1,2 6,1 6,7 1,2 7,0 2,2 -1,3

Argentina 14,6 16,6 -4,7 3,3 -5,2 2,3 17,1 2,1 8,1 7,0 14,1

Poland 6,1 -1,4 -0,9 0,2 1,0 -4,0 2,5 -4,2 0,8 -3,6

Hungary 1,6 -1,4 -0,5 -2,3 -4,6 -4,4 -1,0 -7,1 0,6 2,1

Turkey 9,2 -0,3 6,0 3,2 -0,6 4,5 11,8 -14,4 7,7 1,4 0,3

China 3,9 -4,4 9,2 -20,8 13,8 -2,8 1,0 -1,3 3,3 -1,0 -3,2

Korea 3,6 -1,7 -6,2 -11,3 -8,4 -2,1 -9,8 -13,8 -11,0 -13,8 -11,7 -14,7

Hong Kong -0,8 -5,8 -0,4 -6,9 -1,2 -2,6 -2,4 -9,0 -5,7 -6,3 -7,3

Singapore 8,8 3,3 5,7 -0,3 1,5 7,6 -0,6 -5,0 -6,5 -6,4 -4,7

India 0,8 0,3 3,7 2,4 11,0 0,6 3,9 -9,7 2,3 -6,1 -6,6

Taiwan -3,2 -3,4 -0,5 -8,3 -4,4 -3,7 -4,8 0,4 -0,3 2,8 -4,6

Indonesia -3,2 -3,9 -4,5 -11,2 -9,0 -9,5 -8,5 -8,9 -5,1 -10,0 -5,7

Thailand 0,8 0,3 3,7 2,4 11,0 0,6 3,9 -9,7 2,3 -6,1 -6,6

Vietnam 14,4 13,8 -1,3 5,9 4,7 5,8 6,7 7,3 7,5 7,3 8,2 7,4

Philippines -0,3 -12,3 -6,7 -0,1 -1,8 1,0 1,0 3,3 3,5 0,8 -2,6

median 3,2 -0,5 1,7 1,7 0,4 0,6 2,5 -2,2 0,8 -0,5 -3,9 -14,7

BUSINESS CYCLE

15/11/2019 15

Bron: Merit Capital Macro

TAA GLOBAL MACRO – VS RECESSIE DASHBOARDMERIT CAPITAL US RECESSION DASHBOARD

PRICE INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM

Oil: 2-year rate of change -0,7% 80% no

S&P 500: 1-year rate of change 11,6% -5% no

Cyclical sectors/ Defensive sectors ratio: 1-year rate of change 15,4% <-5% no

Top 5 US banks 5y credit default swap: 1-year rate of change -19,8% >30% no

COMPOSITE LEADING ECONOMIC INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM

US real final sales: 1-year rate of change 2,3% <2,5% yes

NY Fed probability of recession 12m ahead (treasury spread) 29% > 25% yes

Cleveland Fed probability of recession 12m ahead (yield curve) 31% > 25% yes

OECD leading indicator: 2-month net change -0,20 < -0,25 no

Aruoba Diebold Scotti Business Conditions indicator -0,22 <-0,5 no

Conference board LEI index: 1-year rate of change 0,4% < 2% yes

Conference leading & coincident ratio: 2-year rate of change 3,9% <0 no

Chicago Fed National Activity Index: 3 month moving average -0,24 <-0,6 no

Chicago Fed National Activity Index: diffusion index -0,25 <-0,35 no

Philadelphia Fed leading index 1,48 <0,6 no

Philadelphia Fed number of states with negative monthly change 8 >18 no

Chemicals Activity Barometer: 3-month ma of 1-year rate of change -0,50 <0 yes

ECONOMIC ACTIVITY SOFT DATA (SURVEYS)CURRENT

LEVEL

RECESSION

LEVELALARM

ISM manufactucturing & non-manufacturing new orders 52,35 <52 no

Kansas Fed Composite Index -3,00 <0 yes

Kansas Fed Composite Index: 6-month net change -8,00 <-10 no

NACM US credit managers index composite 54,60 <52 no

NACM US credit managers unfavorable factor combined sectors 50,90 <50 no

ECONOMIC ACTIVITY HARD DATA (REAL OUTPUT)CURRENT

LEVEL

RECESSION

LEVELALARM

Rail Intermodal Loadings: 1-year rate of change -1,2% <0% yes

Auto sales : 1-year rate of change of 12-month moving average -1,1% <0% yes

CONSUMER SPENDING INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM

Johnson redbook same store sales YoY%: 6-month moving average 5,4% <3% no

Conference board consumer confidence: 1-year net change -12,00 <-15 no

LABOR INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM

Unemployment rate: 6-month net change 0,0% >0% no

Part time employment economic reasons: 1-year rate of change -4,1% >7% no

Initial Jobless claims: 1-year rate of change in 4 week moving avg -0,6% >5% no

Conference board employment trend index: 1-year rate of change -0,4% <0% yes

Kansas Fed Labor market conditions level of activity indicator 1,06 <0 no

HOUSING INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM

Conference board Leading Index building permits: 2-year roc 3,3% <0% no

New one family houses: 1-year rate of change of 1-year average -0,9% <0% yes

LIQUIDITY INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM

Fed Central Bank Rate: Real Rate 0,1% >3% no

Restrictive Fed Policy: real fed rate versus natural rate -1,2% >0% no

US Investment Grade Bonds : Real Rate 1,3% >4% no

US High Yield Bonds: Real Rate 3,9% >8% no

US Average Mortgage Rate: Real Rate 2,1% >4% no

Financial stress: Bloomberg US financial conditions index plus 1,63 <0 no

Financial stress: Bloomberg US financial conditions index 0,35 <-0,5 no

Financial stress: Goldman US financial conditions index 99,07 >100 no

Speed of financial stress: Goldman US FCI: 1-year net change -0,74 >0,5 no

Money Market stress: US TED spread 35,36 >50 no

Money Market stress: US Libor OIS spread 33,15 >50 no

Money market stress: EUR Euribor OIS spread 0,06 >50 no

Money market stress: US Libor OIS spread 0,11 >50 no

Corporate bond market stress: IG spread 107,00 >150 no

Corporate bond market stress: HY spread 370,00 >500 no

Yield curve: 10y-2y spread 23 <0 no

Yield curve: 10y - 3m spread 30 <0 no

Credit supply: SLO survey: some tightening - some easing 5% >0% yes

Credit supply: SLO Survey: considerable tightening - some easing 0% > 2% no

Credit supply: SLO Survey: mortgage tightening standards 2% > 0% yes

Credit demand: SLO survey: stronger demand C&I loans large corp -22% <-10% yes

Credit demand: SLO survey: stronger demand C&I loans small corp -17% <-10% yes

Credit demand: SLO survey: stronger demand auto loans 10% <-10% no

Credit demand: SLO survey: stronger demand credit card loans 6% <-10% no

Credit demand: SLO survey: stronger demand credit card loans 6% <-10% no

Delinquency Rates: total loans & leases: 2-quarter net change -0,03% >0% no

• VS recessiesignalen: zelfde als vorige keer

• Te weinig alarm. Hoofdzakelijk alarm op vlak vanrentecurve en industriële sector.

• Prijsindicatoren: sterk• Consument/arbeid/huizenmarkt: sterk

• Liquiditeitsindicatoren: sterk

• Kredietcyclus: plotse achteruitgang in vraag naar krediet.Nu FED rente verlaagt, moet dit hopelijk snel verbeteren.Op te volgen!

BUSINESS CYCLE

15/11/2019 16

Bron: Merit Capital Macro

TAA GLOBAL MACRO – EUROZONE RECESSION DASHBOARD

MERIT CAPITAL EUROZONE RECESSION DASHBOARD

PRICE INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM COMMENT

Has oil doubled over two years time in the last 4 years

MSCI EMU: 1-year rate of change 11,8% 0% no

Cyclical sectors/ Defensive sectors ratio: 1-year rate of change -10,6% <-5% yes

Top 5 EUR banks 5y credit default swap: 6-month rate of change -18,5% >30% no

COMPOSITE LEADING ECONOMIC INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM COMMENT

Average Real Quarterly GDP Growth over last 3Q 0,3% <0,15% no

OECD leading indicator: <100 98,96 < 100 yes

OECD leading indicator: 2-month net change -0,20 < -0,25 no

ECONOMIC ACTIVITY SOFT DATA (SURVEYS)CURRENT

LEVEL

RECESSION

LEVELALARM COMMENT

Composite PMI indicator 50,60 <51 yes

ECONOMIC ACTIVITY HARD DATA (REAL OUTPUT)CURRENT

LEVEL

RECESSION

LEVELALARM COMMENT

CONSUMER SPENDING INDICATORSCURRENT

LEVEL

RECESSION

LEVELALARM COMMENT

Eurostat Real Retail Sales: 1-year rate of change 2,1% <0,5% no

Eurostat Real Retail Sales: 3-month ma of 1-year rate of change 2,0% <1% no

Under construction…

GLOBAL POLICY OUTLOOK

15/11/2019 17

Source: Merit Capital Macro & topdwon charts

• Centrale banken verlagen de rente• Nieuwe Fed-indicatie: HOLD (zicht op beterschap in groei en minder onzekerheid?)

• Centrale banken uit de groeilanden nemen het voortouw

• Dit zou moeten leiden tot een heropleving in industriële activiteit binnen 6 tot 9 maanden.

• Een verdere escalatie in de China-VS relaties kan roet in het eten gooien

TAA – GLOBAL MACRO – MONETARY POLICY

GLOBAL POLICY OUTLOOK

15/11/2019 18

FISCALE IMPULS?

• Komende twee jaar kan de fiscale impuls ondersteunend werken. Dit in tegenstelling tot de voorbije Jaren.

Bron: Merit Capital Macro Research

DEVELOPED GOVERNMENT - DEFICITS & FORECASTED DEFICITS/ FISCAL IMPULES (CHANGE IN DEFICITS & FORECASTED DEFICITS)

15 16 17 18 19 20 21

2015 2016 2017 2018 3Y IMPULSE NOW YTD IMPULSE 2019 1Y IMPULSE 2020 2Y IMPULSE 2021 3Y IMPULSE

US -2,53% -2,89% -3,44% -4,11% -1,6% -4,51% -0,4% -4,43% -0,3% -4,70% -0,6% -5,00% -0,9%

Canada -0,06% -0,42% -0,31% -0,43% -0,4% -0,15% 0,3% -0,50% -0,1% -0,80% -0,4% -0,50% -0,1%

UK -4,05% -2,84% -1,87% -1,43% 2,6% -1,27% 0,2% -1,50% -0,1% -1,60% -0,2% -1,20% 0,2%

Eurozone -2,04% -1,56% -0,98% -0,53% 1,5% -0,65% -0,1% -1,00% -0,5% -1,10% -0,6% -1,00% -0,5%

Ireland -1,94% -0,67% -0,28% 0,01% 2,0% 0,02% 0,0% 0,00% 0,0% 0,10% 0,1% 0,10% 0,1%

Germany 0,79% 0,92% 1,05% 1,71% 0,9% 1,75% 0,0% 1,00% -0,7% 0,50% -1,2% 0,30% -1,4%

France -3,63% -3,54% -2,77% -2,53% 1,1% -3,19% -0,7% -3,20% -0,7% -2,50% 0,0% -2,40% 0,1%

Italy -2,61% -2,52% -2,39% -2,14% 0,5% -2,12% 0,0% -2,45% -0,3% -2,85% -0,7% -2,65% -0,5%

Spain -5,27% -4,47% -3,08% -2,48% 2,8% -2,43% 0,0% -2,30% 0,2% -2,00% 0,5% -1,65% 0,8%

Portugal -4,40% -1,97% -2,96% -0,45% 4,0% -0,12% 0,3% -0,40% 0,1% -0,30% 0,2% -0,10% 0,4%

Belgium -2,39% -2,41% -0,83% -0,69% 1,7% -0,96% -0,3% -1,35% -0,7% -1,50% -0,8% -1,30% -0,6%

Netherland -2,02% 0,02% 1,26% 1,49% 3,5% 1,75% 0,3% 1,20% -0,3% 0,80% -0,7% 0,90% -0,6%

Luxemburg 1,43% 1,85% 1,43% 2,41% 1,0% 2,81% 0,4% 1,25% -1,2% 0,90% -1,5% 0,90% -1,5%

Sweden 0,04% 1,03% 1,42% 0,89% 0,9% 0,56% -0,3% 0,50% -0,4% 0,40% -0,5% 0,45% -0,4%

Denmark -1,33% -0,07% 1,45% 0,56% 1,9% 0,70% 0,1% 0,25% -0,3% 0,00% -0,6% -0,05% -0,6%

Finland -2,75% -1,72% -0,79% -0,80% 2,0% -0,85% -0,1% -0,50% 0,3% -0,50% 0,3% -0,50% 0,3%

Norway 6,13% 3,99% 4,98% 7,23% 1,1% 7,36% 0,1% 7,45% 0,2% 7,15% -0,1% 6,40% -0,8%

Switzerland 0,65% 0,38% 1,27% 1,20% 0,6% 1,21% 0,0% 0,50% -0,7% 0,40% -0,8% 0,20% -1,0%

Austria -1,02% -1,55% -0,76% 0,11% 1,1% -0,22% -0,3% 0,10% 0,0% 0,10% 0,0% 0,00% -0,1%

Israel -2,14% -2,11% -1,95% -2,92% -0,8% -3,87% -1,0% -3,90% -1,0% -3,50% -0,6% - -

Japan -3,56% -3,46% -2,96% -2,54% 1,0% -2,54% 0,0% -3,50% -1,0% -3,00% -0,5% -2,80% -0,3%

Hong Kong 1,91% 3,26% 7,46% 3,43% 1,5% 2,68% -0,8% 0,55% -2,9% 0,80% -2,6% - -

Singapore 0,57% -1,13% -0,30% 0,38% -0,2% -0,61% -1,0% -0,70% -1,1% -0,65% -1,0% - -

Australia -1,19% -1,72% -0,76% -0,01% 1,2% -0,01% 0,0% -0,10% -0,1% 0,30% 0,3% 0,25% 0,3%

New Zeal. 0,32% 1,20% 1,15% 0,10% -0,2% 0,10% 0,0% 0,60% 0,5% 0,70% 0,6% 0,50% 0,4%

Average -1,24% -0,90% -0,20% -0,06% 1,2% -0,18% -0,1% -0,50% -0,4% -0,51% -0,5% -0,42% -0,3%

Median -1,94% -1,55% -0,76% -0,01% 1,1% -0,15% 0,0% -0,40% -0,3% -0,30% -0,5% -0,08% -0,4%

Eurozone -2,04% -1,56% -0,98% -0,53% 1,5% -0,65% -0,1% -1,00% -0,5% -1,10% -0,6% -1,00% -0,5%

DEVELOPEDCONSENSUS ECONOMIC FORECASTSNOWHISTORICAL

TAA – GLOBAL MACRO – FISCAAL BELEID

FUNDAMENTALS

15/11/2019 19

Bron: Merit Capital Macro

TAA – GLOBAL MACRO – FUNDAMENTALS: waarderingen

DIV VAL% P/E VAL%

avg 2,30% 8,00% 19 13,1%

now 2,50% 16,8

BEAR BASE BULL

DIVIDEND YIELD 2,5% 2,5% 2,5%

+CHANGE IN VALUATIONS -16% 8% 13%

+MERIT CAPITAL EPS EXPECTATIONS -15% 2% 10%

CONSENSUS EPS EXPECTATIONS 10% 10% 10%

WORLD RETURN NEXT YEAR -28,5% 12,5% 25,5%

• Bear: sentiment/waarderingen gaan naar gemiddelde van vorige laagtepunten en winsten vallen 15% versus 10% verwacht.

• Base: sentiment/waarderingen gaan hoger (div yield naar 2,3%). Winsten stijgen slechts 2% versus 10% verwachting

• Bull: sentiment/waarderingen gaan stuk hoger (P/E naar 19) en winsten stijgen in lijn met consensus.

FUNDAMENTALS

15/11/2019 20

Bron: Merit Capital Macro

TAA – GLOBAL MACRO – FUNDAMENTALS: winstevolutie en verwachte winst