PORTFOLIO STRATEGY  | PUBLISHED BYRAYMOND JAMES & ASSOCIATES

Michael Gibbs, Director of Equity Portfolio & Technical Strategy | (901) 579-4346 | michael.gibbs@raymondjames.comJoey Madere, CFA | (901) 529-5331 | joey.madere@raymondjames.comRichard Sewell, CFA | (901) 524-4194 | richard.sewell@raymondjames.comMitch Clayton, CMT, Senior Technical Analyst | (901) 579-4812 | mitch.clayton@raymondjames.com

JUNE 24, 2021 | 3:05 PM EDT

Weekly Market Guide

Short-Term Summary:

The aftermath of the FOMC announcement since last Wednesday (6/16) has seen the yield curve narrow to 1.23%(as short-term rates moved up, and longer-term rates moved down). The yield curve can often be used as a gaugeof economic expectations, so the narrowing has stoked some concerns about the health of the recovery. Webelieve that is a misinterpretation, with our view supported by a narrowing in credit spreads to multi-year lows.There has been a 90% inverse correlation between credit spreads and the yield curve over the past year, so it hasbeen unusual for them to both move in the same direction (i.e. both lower over the past week). Additionally, someof the more defensive, interest-sensitive areas such as Consumer Staples and Utilities both pushed to new relativelows (positive indication for market trends). We view the economic recovery on solid footing, and ultimatelybelieve long-term rates will grind higher as the recovery transpires. So broadly, we view still low rates and lowercredit spreads as supportive of equity markets. The aftermath has been felt more at the individual sector andstock level. And while it is difficult to determine how long this will play out in the short term, we would be usingthe pullbacks in certain areas as an opportunity to accumulate for a 6-12 month time horizon.

The S&P 500 was able to hold support at its 50-day moving average over the past week and bounce to new all-time highs today. This trend has largely been the case since early November positive vaccine news. However,the breakout is occurring with less than half of stocks above their 50 DMA- reflecting the still very rotationalmarket playing out beneath the surface. The banks were the biggest victim of the yield curve narrowing, and werecommend accumulating the pullback. Close to 0% of bank stocks are above their 10, 20, or 50 DMA but 100%remain above their 200 DMA- reflecting oversold short term conditions within a solid intermediate term backdrop.Additionally, the Fed releases results of both the Dodd-Frank Act stress test (DFAST) and Capital Analysis andReview (CCAR) today, which could act as a catalyst for the group- as capital return announcements are likely tofollow in our view, which could be substantial. Sector rotation over the past week has also put added pressure onthe relative performance of Value (vs Growth). Value's relative strength uptrend is being tested, but the group isoversold enough in the short term for a bounce in our view. 10-day relative performance for the group has declinedto a similar degree witnessed in January and April, in which the uptrend held and relative strength improved. Westill have a bias for Value to maintain leadership- supported by strong fundamental momentum and a historicallycheap relative valuation- and would use the pullback as an opportunity. .

INTERNATIONAL HEADQUARTERS: THE RAYMOND JAMES FINANCIAL CENTER | 880 CARILLON PARKWAY | ST. PETERSBURG FLORIDA 33716

MACRO: US

As discussed on the front page, the yield curve has narrowed following the FOMC announcement last week (with short-term rates higher, and long-term rates lower). This has spurred some concerns about the economic recovery, with the yield curve often used as a gauge of economic strength. However, credit spreads also pushed to new lows in the aftermath (to multi-year lows)- suggesting a lack of concern from the bond market. We view the economic recovery on solid footing, and ultimately believe long-term rates will grind higher as the recovery transpires. So broadly, we view still low rates and lower credit spreads as supportive of equity markets. June Manufacturing and Services PMI were reported this week, reflecting continued improvement in the manufacturing backdrop as Manf. PMI improved to new highs of 62.6 (from 62.1 last month, and above 61.5 estimates). Services PMI pulled in to 64.8 from 70.4 last month (and below estimates of 69.8), however this is still a very strong reading. Globally, EU manufacturing and services PMI both advanced in June to 63.1 and 58.0 respectively, while Japan manufacturing PMI continued to decelerate- down to 51.5.

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

Yield curve narrows following FOMC announcement…

…But so did corporate credit spreads (to multi-year lows)

(2Yr Yield up, 10Yr Yield down)

US Economic Data This Week Period Actual Consensus Prior

Existing Home Sales SAAR MAY 5,800K 5,700K 5,850K

Richmond Fed Index JUN 22.0 17.0 18.0

Building Permits SAAR (Final) MAY 1,681K 1,681K 1,681K

Current Account SA Q1 -$195.7B -$206.0B -$175.1B

PMI Composite SA (Preliminary) JUN 63.9 67.6 68.7

Markit PMI Manufacturing SA (Preliminary) JUN 62.6 61.5 62.1

Markit PMI Services SA (Preliminary) JUN 64.8 69.8 70.4

New Home Sales SAAR MAY 769.0K 875.0K 817.0K

Continuing Jobless Claims SA 06/12 3,390K 3,510K 3,534K

Durable Orders ex-Transportation SA M/M (Preliminary) MAY 0.30% 0.70% 1.7%

Durable Orders SA M/M (Preliminary) MAY 2.3% 3.0% -0.80%

GDP SAAR Q/Q (Final) Q1 6.4% 6.4% 6.4%

GDP SA Y/Y (Final) Q1 0.40% 0.40% 0.40%

Initial Claims SA 06/19 411.0K 380.0K 418.0K

Wholesale Inventories SA M/M (Preliminary) MAY 1.1% 0.60% 1.0%

PAGE 2 OF 12

PORTFOLIO STRATEGY

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

FUNDAMENTALS

The strong macro-economic recovery, supported by enormous stimulus in the reopening, is leading to very strong earnings growth. Q1 was one of the sharpest upsides to estimates witnessed on record; and while analysts are steadily revising Q2, Q3, and Q4 estimates higher, they still appear too low in our view. For example, Q2 estimates still reflect a -7% sequential contraction. We also continue to closely monitor margins due to supply chain constraints and rising input costs, but operating and net margin estimates continue to push higher (at very strong levels). We expect continued upside in earnings estimates, and officially increased our full-year 2021 base case earnings estimate to $200 this week. This was our prior bull case estimate, which the macro has been progressing toward. We expect valuation multiples to normalize as earnings recover this year, and use a 22x trailing 12-month P/E assumption for year-end (down from current 25.5x). This results in a 4400 base case target price for the S&P 500. And applying our new 2022 base case earnings estimate of $230, this would reflect forward multiples contracting back to pre-pandemic levels at ~19x. For further information on our fair value range, please see our note from yesterday here- S&P 500 2021 Fair Value Revision.

RJ Base Case Estimates 2021: $200 2022: $230

P/E normalization not to outweigh robust

earnings growth

Q2, Q3, and Q4 earnings estimates still look too low following

Q1’s record surge

PAGE 3 OF 12

PORTFOLIO STRATEGY

TECHNICAL: S&P 500

The S&P 500 tested 50-day moving average support and held over the past week- continuing a trend that has largely transpired since the positive vaccine news in early November. Also at its recent lows, over 50% of stocks were at 4-week lows. This seems unusual with the index only reaching roughly 2% down from its highs. However, forward returns historically following similar readings have typically been above average. The index has since broken out to new highs today, however less than 50% of stocks are above their 50 DMA- reflecting the still very rotational market taking place beneath the surface. The upshot is we remain positive on intermediate term technical trends, and expect sector/stock rotation to continue. As rolling pullbacks occur in favored sectors and stocks, we recommend using them as buying opportunities. Short-term Potential Support: • 4190 (50 DMA) • ~4060 (most recent reaction low) Short-term Potential Resistance: • ~4274 (Fibonacci projection) • 4419 (distance equal to the height of the recent

sideways pattern, and upper-end of trading range since November)

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

S&P 500 at top end of digestion range since mid-April

PAGE 4 OF 12

PORTFOLIO STRATEGY

VALUE

The narrower yield curve in the aftermath of the FOMC announcement has weighed on Value stocks. This is the third meaningful wave of underperformance for Value vs Growth this year with the 10-day rate of relative performance coming in line with periods in January and April. A moderation in interest rates was the catalyst for both of those prior periods as well, but resulted in a good buying opportunity as relative strength resumed. While it is difficult to determine how long the moderation in long-term rates will play out in the short term, we would be using the pullback in Value as an opportunity to accumulate with a 6-12 month time horizon. We continue to have a bias toward Value maintaining its market leadership in the coming months, supported by strong fundamental momentum and still attractive valuation.

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

Value vs Growth – 10 Day Rate of Change

Relative strength uptrend being tested

PAGE 5 OF 12

PORTFOLIO STRATEGY

VALUE

We also view Value as short-term oversold within an intermediate-term uptrend. Value is oversold enough in the short term to bounce with the percentage of stocks above their 10-, 20-, and 50-day moving averages turning up from oversold levels- similar occurrences historically have typically been good buying opportunities. At the same time, longer-term Value trends remain strong with 88% of stocks above their 200 DMA.

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

S&P 500 Value

Solid intermediate-term backdrop

Covid

PAGE 6 OF 12

PORTFOLIO STRATEGY

BANKS

The banks were the biggest victim of the yield curve narrowing, and we recommend accumulating the pullback. Close to 0% of bank stocks are above their 10-, 20-, or 50-DMA but 100% remain above their 200 DMA- reflecting oversold short term conditions within a solid intermediate term backdrop. Additionally, the Fed releases results of both the Dodd-Frank Act stress test (DFAST) and Capital Analysis and Review (CCAR) today, which could act as a catalyst for the group- as capital return announcements are likely to follow in our view, which could be substantial.

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

The lower 10-year Treasury yield weighed on Bank relative

performance- providing opportunity in our view

PAGE 7 OF 12

PORTFOLIO STRATEGY

DEFENSIVE AREAS PUSH TO NEW RELATIVE LOWS Through the market’s volatility over the past week in the aftermath of the FOMC announcement, some of the more defensive, interest-sensitive areas- such as Consumer Staples and Utilities- pushed to new relative lows (vs the S&P 500). Also, Consumer Discretionary has firmly maintained its upper hand over Consumer Staples. Continued underperformance from the “risk-off” areas, despite a narrower yield curve, supports our positive view on the broader market’s fundamental and technical backdrop.

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

Consumer Staples push to new relative lows…

… same for Utilities

PAGE 8 OF 12

PORTFOLIO STRATEGY

SMALL CAPS

The small caps continue their pause phase, digesting enormous gains from November to March. This is very normal and healthy technically. We remain positive on the small caps, and would be accumulating during the group’s basing pattern.

Source: FactSet, Raymond James Equity Portfolio & Technical Strategy

Small caps continue pause phase- would be accumulating

Small cap relative earnings trends should benefit relative

performance trends

Small caps trade at 15% discount on

forward P/E

M21-3646472

PAGE 9 OF 12

PORTFOLIO STRATEGY

IMPORTANT INVESTOR DISCLOSURESThis material is being provided for informational purposes only. Expressions of opinion are provided as of the date above and subject to change. Any information should notbe deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guaranteethat such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does notinclude all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individualsituation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts providedherein will prove to be correct.

Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject torapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.

Commodities and currencies investing are generally considered speculative because of the significant potential for investment loss. Their markets are likely to be volatile andthere may be sharp price fluctuations even during periods when prices overall are rising.

Links to third-party websites are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any ofthe listed websites or their respective sponsors. Raymond James is not responsible for the content of any third-party website or the collection or use of information regardingany websites users and/or members.

This report is provided to clients of Raymond James only for your personal, noncommercial use. Except as expressly authorized by Raymond James, you may not copy,reproduce, transmit, sell, display, distribute, publish, broadcast, circulate, modify, disseminate, or commercially exploit the information contained in this report, in printed,electronic, or any other form, in any manner, without the prior express written consent of Raymond James. You also agree not to use the information provided in this report forany unlawful purpose. This report and its contents are the property of Raymond James and are protected by applicable copyright, trade secret, or other intellectual propertylaws (of the United States and other countries). United States law, 17 U.S.C. Sec. 501 et seq, provides for civil and criminal penalties for copyright infringement. No copyrightclaimed in incorporated U.S. government works.

Index Definitions

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.

The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market.

The MSCI World All Cap Index captures large, mid, small and micro-cap representation across 23 Developed Markets (DM) countries. With 11,732 constituents, the index iscomprehensive, covering approximately 99% of the free float-adjusted market capitalization in each country.

The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance,excluding the United States & Canada. The EAFE consists of the country indices of 21 developed nations.

The MSCI Emerging Markets Index is designed to measure equity market performance in 23 emerging market countries. The index's three largest industries are materials,energy, and banks.

The Russell 2000 index is an index measuring the performance of approximately 2,000 smallest-cap American companies in the Russell 3000 Index, which is made up of 3,000of the largest U.S. stocks.

The NYSE Alerian MLP is the leading gauge of energy infrastructure Master Limited Partnerships (MLPs). The capped, float-adjusted, capitalization-weighted index, whoseconstituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMZ) and on atotal-return basis (AMZX).

PAGE 10 OF 12

PORTFOLIO STRATEGY

The Barclays Intermediate Government/Credit Bond index measures the performance of U.S. Dollar denominated U.S. Treasuries, government-related and investment gradeU.S. corporate securities that have a remaining maturity of greater than one year and less than ten years.

The Euro Stoxx 50 Index is a market capitalization weighted stock index of 50 large, blue-chip European companies operating within Eurozone nations. Components areselected from the Euro STOXX Index which includes large-, mid- and small-cap stocks in the Eurozone.

The China CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of top 300 stocks traded in the Shanghai and Shenzhen stockexchanges. It had a sub-indexes CSI 100 Index and CSI 200 Index.

The S&P 500 Futures is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in theaggregate market value of 500 stocks representing all major industries.

The DJIA Futures is a stock market index futures contract traded on the Chicago Mercantile Exchange`s Globex electronic trading platform. Dow Futures is based off the Dow30 stock index.

The Nasdaq 100 Futures is a modified capitalization-weighted index of the 100 largest and most active non-financial domestic and international companies listed on theNASDAQ.

Europe: DAX (Deutscher Aktienindex (German stock index)) is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt StockExchange.

Asia: Nikkei is short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index composed of Japan's top 225blue-chip companies traded on the Tokyo Stock Exchange.

Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investmentperformance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investmentyields will fluctuate with market conditions.

International Disclosures

For�clients�in�the�United�Kingdom:

For clients of Raymond James Financial International Limited (RJFI): This document and any investment to which this document relates is intended for the sole use ofthe persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in the FCA rules or persons described in Articles 19(5)(Investment professionals) or 49(2) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order2005 (as amended)or any other person to whom this promotion may lawfully be directed. It is not intended to be distributed or passed on, directly or indirectly, to any otherclass of persons and may not be relied upon by such persons and is, therefore, not intended for private individuals or those who would be classified as Retail Clients.

For clients of Raymond James Investment Services, Ltd.: This document is for the use of professional investment advisers and managers and is not intended for use byclients.

For�clients�in�France:

This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are EligibleCounterparties or Professional Clients as described in "Code Monetaire et Financier" and Reglement General de l'Autorite des marches Financiers. It is not intended to bedistributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is, therefore, not intended for private individualsor those who would be classified as Retail Clients.

For clients of Raymond James Euro Equities: Raymond James Euro Equities is authorised and regulated by the Autorite de Controle Prudentiel et de Resolution and theAutorite des Marches Financiers.

PAGE 11 OF 12

PORTFOLIO STRATEGY

For�institutional�clients�in�the�European�Economic�rea�(EE�)�outside�of�the�United�Kingdom:

This document (and any attachments or exhibits hereto) is intended only for EEA institutional clients or others to whom it may lawfully be submitted.

For�Canadian�clients:

This document is not prepared subject to Canadian disclosure requirements, unless a Canadian has contributed to the content of the document. In the case where there isCanadian contribution, the document meets all applicable IIROC disclosure requirements.

Broker Dealer Disclosures

Securities are: NOT Deposits • NOT Insured by FDIC or any other government agency • NOT GUARANTEED by the bank • Subject to risk and may lose value

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. Raymond James Financial Services, Inc., member FINRA/SIPC. Raymond James® is aregistered trademark of Raymond James Financial, Inc.

PAGE 12 OF 12

PORTFOLIO STRATEGY