The stock market corrected sharply and will likely remain bumpy, but the macro ... Despite the first half action, we rem
Outlook 2018 a y e a r o f p o s i t ive bu t sh iftin g fo rces Mid-Ye ar U pdate
INVESTMENT
STRATEGY
GROUP
Janney Outlook 2018 Mid-Year Update Overview • Vibrant economic activity should persist through the year, supporting corporate earnings growth at a high level. • Volatility has erupted as monetary and geopolitical cross currents shift from last year’s tranquil paradigm. • The stock market corrected sharply and will likely remain bumpy, but the macro underpinnings remain conducive for risk assets to flatter balanced portfolios. • Fixed income markets had a tough first half, with interest rates rising across maturities in the U.S. • Typically, the yield curve flattens and long-term rates begin to decline 18–24 months before an economic downturn. • Despite the first half action, we remain modestly bullish on interest rates, a contrarian view reflecting the probability of a downturn in the next several years. • Bouts of volatility will persist in the taxable fixed income markets, risking sharp swings in credit spreads. • High-yield bonds remain enticing by offering attractive relative returns, but longterm investors may fare better by diversifying across the fixed income spectrum. • Along with lower-rated securities, emerging markets debt remains a tricky area for investment and, in certain corners, fraught with risk. • Assuming the wave of refinancing activity induced by lower rates has mostly passed, mortgage securities present a compelling alternative to other risk assets. • Strong seasonal buying interest provides solid municipal bond support, countering the reduced demand from banks resulting from a lower corporate tax rate. • Although Puerto Rico remains a headline risk, state and local government credit conditions are stabilizing, with rating agency upgrades exceeding downgrades.
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Economy & Equity Markets By Mark Luschini, CMT, Chief Investment Strategist
Preview The Mid-Year Update is an opportunity to look back on the year’s first half and adjust forecasts for the remainder of it, if necessary, from that which we foresaw in our Outlook 2018 publication released back in December. In all, there is little change required. We expected a more complicated landscape for investors this year as shifting forces impacted the economy and financial markets. We also believed that the underlying conditions that would facilitate continued positive economic growth would remain intact, and the potential boost from fiscal impulses would serve to augment the pace of activity. While we expected greater market volatility this year, we did not recommend shifting to a more cautious position in risk assets. And while we anticipated yields to move higher, which they have, rates were expected to remain relatively low by historical standards in the absence of an inflationary threat. Of the risks to our view, North Korea has subsided for now, but China remains a dominant concern on both trade and sovereign policy matters. In all, the commentary in Outlook 2018 proved prescient, so we encourage clients to read on for what our Investment Strategy Group believes the rest of the year holds in store for the economy and financial markets. Present Following a somewhat soft economic reading for the first quarter, the pace of growth going into the year’s second half has quickened. Two regional Federal Reserve Banks, those of Atlanta and New York, are reporting current levels of activity smartly above that which was produced during the first three months of the year, and even better than what we have seen for the last several years. The expected fiscal impulse from the Tax Cuts and Jobs Act (TCJA) should further boost economic growth such that the duration of this already lengthy expansion stretches well beyond this year. Chart 1, depicting Gross Domestic Product (GDP) in the U.S., is marked by positive growth having been sustained for nine full years—the second longest period in history.
Chart 1: U.S. GDP
(Source: Janney ISG, BEA)
Enabling the economy to prosper is the firm footing of the U.S. consumer. Several factors have evolved positively in support of the consumer’s habitual tendency to spend. Job growth has continued at a steady pace, which has helped to draw the rate of unemployment under 4%, a level well below the Federal Reserve’s own estimate of full employment and the lowest since 2000 (see chart 2). Indeed, it is likely the unemployment rate will fall toward the mid-3% range by yearend, achieving the lowest reading since the 1960s. Tighter labor conditions have pressed wages higher with more upside probable, given a shrinking labor pool and business survey respondents declaring a need to adjust compensation higher to attract and retain workers. Chart 2: U.S. Unemployment Rate
(Source: Janney ISG, Bloomberg)
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Aggregate household net worth breached $100 trillion in the first quarter—almost 50% higher than when it last peaked in 2007—as a result of rising home values and stock prices. Between the optimism expressed by consumers concerning labor conditions and the spending power engendered by increased wealth and wages, surveys of consumer confidence are unsurprisingly at or near high water marks. In all, the consumer is well poised to continue contributing to economic activity in a positive fashion. Meanwhile, business spending has come alive in conjunction with a healthy period of profit growth and ignited animal spirits. A capital expenditure upcycle is underway and accelerating, which is not only adding an incremental tailwind to the economy, but should lead to improved productivity. This, in turn, will not only help businesses sustain their margins even after unit labor costs creep higher, but also lead to wage improvements, further boosting the consumer’s pocketbook. Surveys of business leaders from companies large to small are reporting high levels of confidence and almost uniformly expect sales to remain solid, have plans to expand, raise wages, and hire. After having business spending decline meaningfully in 2014–2015, the rebound in investment led by energy, technology, consumer–facing industries, and industrial companies is an expected, but no less welcome, augmentation to domestic activity. Industrial production (see chart 3) is a litmus test for output across the manufacturing, mining, and utilities sectors of the economy. Notoriously sensitive to demand, this data serves as a leading indicator of economic performance, and it is unequivocally flashing green at present. Chart 3: U.S. Industrial Production
(Source: Janney ISG, Federal Reserve)
The stock market has regained some traction as we go to press, but, as yet, not fully recovered the ground lost in the correction that occurred in the late January to early February period. After falling more than 10% from the peak of 2,873 on the S&P 500 index, equities have embarked on a protracted recovery that is still a few percent shy of the all-time high (as of this writing). Still, the gains year-to-date have been decent as judged by the positive, albeit low single digit return of the large cap indices and, more impressively, the roughly double digit advance of small company stocks. We expect the sound macroeconomic underpinnings to support stocks over the balance of the year. Given the pro-growth view we espouse, cyclical industries such as energy, financials, tech, industrials, and consumer discretionary remain our favorites. In addition, the soft performance of European equities so far this year masks the abovetrend level of growth elicited across the Euro area, which has similar positive momentum to that of the U.S. We expect investor sentiment toward Europe to improve and stock prices to better reflect the underlying strength in corporate profits. To be sure—as always, risks abound. Those that follow are top of mind and, other than trade policies being our greatest concern, are listed in no particular order. • Sino-American relations are complex and nuanced. While there has been cooperation on matters relating to North Korea and its nuclear threat, there is a clear lack thereof around China’s militaristic movements in the South China Sea. Trade negotiations with China will likely be resolved in a give-and-take that will allow each party to walk away from the table with something, but what will satisfy that outcome remains open-ended. • Italy may face a showdown with the European Union later this year over its budget proposal. A threat—although not one that we believe to be realistic at the moment—that Italy could leave the single currency may erode confidence and raise contagion risks given the country’s level of indebtedness. • On the issue of debt, more than a few emerging market countries are vulnerable to a sustained increase in the U.S. Dollar. Those holding large sums of dollar-denominated debt, such as Turkey, Argentina, Chile, and Indonesia, may encounter trouble as those bonds mature over the 18 months.
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• The re-imposition of sanctions on Iran, at the same time oil prices are already high and Venezuela’s oil production capabilities are declining, could spark a spike in oil prices, harming economic activity. • A blunder by the Federal Reserve, caused by raising rates more than the economy can withstand, could bring an end to the economy’s expansion prematurely. Conversely, should policymakers fall behind the curve and inflation significantly overshoot its target, market participants may fear a more aggressive posture than expected may need to be adopted.
As usual, our prognostication for the market’s path forward includes three potential outcomes that are built off various economic scenarios that could unfold, however likely. Interestingly, amidst the geopolitical machinations and market gyrations witnessed so far this year, the target prices we established for the S&P 500 index in our annual Outlook piece published last December are unchanged. However, the probabilities assigned to them did, which, in turn, lowered our ensemble target to a level that, while still positive, reflects a view that our stock market outlook has dimmed somewhat from the beginning of the year.
Various Economic Scenarios and Probable Outcomes Scenario 1: The Economy Picks Up Steam The consequence of tax cuts and fiscal spending layered on top of an already sturdy economy lifts activity above expectations. Investors realize corporate profit growth, while high and more likely than not to decelerate, is equally unlikely to wither in the coming quarters. Participants bid prices higher to reflect the pace of earnings and lower the risk premium that otherwise would compress multiples. While stocks remain volatile, no encumbrance can’t be overcome by the expectation that its market impact is relatively fleeting. Those sectors poised to benefit from sturdy economic activity lead, such as energy, financials, industrials, and tech, plus small-mid cap stocks outperform. Stocks eclipse the old high, investor sentiment turns increasingly bullish, and the runway opens for the S&P 500 index to reach 3,000. Probability: 50%
Scenario 2: Steady State The fiscal multiplier is de minimis given the underlying strength in the economy. Growth remains steady and persists at above-trend levels. In the absence of heightened activity, inflation progresses along a shallow glide path, enabling the Federal Reserve to raise rates at a leisurely and non-threatening pace. Investors remain skeptical that geopolitical issues resolve in a way such that it no longer remains a disruptive threat. The stock market advances in fits and starts, but without a sustained rally that invites sidelined cash to chase prices significantly higher. At the same time, interest rates that are being increased by monetary officials become increasingly competitive and pressure the bond surrogate sectors. Investors bid the S&P 500 index up to or near the peak established in late January of 2,873. Probability: 40%
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Scenario 3: Tape Bomb Trade negotiations metastasize in an unwelcome direction and Sino-American relations dissolve into a retaliatory tariff war. As this occurs, other trade partners worry that this could harm their participation in global trade and business confidence ebbs. Investors detect that corporate profits could fail to grow at a sufficiently high pace as to warrant current multiples, and the risk premium expands. As the siren sounds risk off, pro-cyclical sectors are sold with the proceeds rotating into defensive sectors, such as Consumer Staples, Utilities, and Telecoms. The S&P 500 index declines sharply and at its nadir prints near 2,400. The Federal Reserve makes dovish comments about the prospects of a diminution of growth, and stocks recover to a level of 2,540. A recession is avoided precluding a deeper drawdown, but stocks fail to close the year in positive territory. Probability: 10%
Bottom Line: Ensemble Forecast The global economy has desynchronized. While U.S. growth is sturdy, if not accelerating, many foreign economies have begun to moderate, but, importantly, at above–trend levels. Heightened risks around trade and China’s hegemon ambitions will play a central role in most discussions of geopolitical concerns. The re-imposition of sanctions on Iran and its jeopardy to diplomatic conditions in the Middle East is another. Oil prices have cooled recently, but a spike induced by a collapse in Venezuelan production or another supply constraint could raise prices and curtail spending. These— among a few other, but less economically impactful risks—could alter the landscape for our baseline forecast for the rest of the year. However, our prognosis is for equities to advance and our ensemble price target of 2,903 to be realized.
Fixed Income Market Interest Rates
By Guy LeBas, CFA, Chief Fixed Income Strategist
2018Change Yield Curve Change Chart 4: 2018 Yield Curve 3.25% 3.00%
+0.36%
2.75%
Equity markets had a very volatile—though generally positive—performance in the first half of 2018. For fixed income, it’s been very nearly the opposite. Thanks to a trend of rising interest rates through the first six months of trading (thus far, rates actually peaked in May), returns have been negative for most bond sectors. Realized volatility of bond markets returns, however, has actually been low. The U.S. Aggregate bond market index has posted a total return of –2.2% as of mid-June, while realized interest rate volatility fell to 9% lower than the last ten years’ average. That, along with a range of positioning data, speaks to a very “consensusdriven” market with relatively few dissenting points of view. As of the time of publication, 10-year Treasury yields are higher by 0.55%, while two-year Treasury yields are higher by 0.63%. There were a few drivers behind the push higher in interest rates, as well as the flattening yield curve.
+0.55%
2.50%
+0.59%
2.25%
+0.63%
2.00% 1.75%
31-Dec
1.50% 1.25%
15-Jun 0yr
5yr
10yr
15yr
20yr
25yr
30yr
Source: Janney ISG
(Source: Janney ISG)
1. Inflation expectations rose alongside higher oil prices (worth about 0.15% of the move). 2. Debt issuance expectations rose alongside tax cuts and spending bills (about 0.15% of the move). 3. Federal Reserve policy turned slightly more hawkish alongside Chair Powell (about 0.10% of the move). 4. Sentiment turned quite negative against interest rates (not measurable, but the balance).
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Casus belli aside, we are modestly bullish on interest rates for the second half of the year, which, given the negative sentiment surrounding bonds, is something of a contrarian viewpoint. The fundamental reason is simple: While there is very little risk of recession in the immediate future, the current economic cycle is getting long in the tooth, and we’ll likely be facing a downturn at the end of 2019 or into 2020. Moreover, a few market signals present today (particularly the combination of a flatting yield curve, a rally in the value of the dollar, and higher oil prices) have preceded nearly every recession in the contemporary era. Bond markets typically start pricing in recession risk 18–24 months before a downturn actually occurs.
While our base case interest rate prognostication for 2H 2018 is positive, one factor could tip the balance: inflation. Inflation is extremely hard to predict in the short term, and, while we have a benign view of inflation, that is nonetheless the biggest risk factor. Investors with a heavy allocation to longer-term fixed income would do well to couple that position with other assets that do well in periods of inflation. While a list of investments positively exposed to inflation is too lengthy to innumerate here, TIPS, dividend growth equities, and commodities are three examples of ways to add inflation balance to a portfolio.
Credit Markets
investors’ hunt for yield and increased appetite for risk. Investors have been more amenable to covenant-lite structures that reduce their protections in the event of default. Recently, both Moody’s and S&P commented on the high yield market, expressing many of the same concerns we highlighted in our various notes from the past year. (Note the table at the end of our February 7 note). Namely, the “low quality of new issuers” coupled with elevated corporate leverage set up the asset class for a challenging situation when the market turns. While a downturn in high yield corporates and leveraged loans may be longer term, as Moody’s suggests, warning signs speak to investors pivoting away from lower rated securities while market liquidity stays solid.
By Jody K. Lurie, CFA, Corporate Credit Strategist
Themes in Corporates Volatility remains ever-present in 2018, a stark contrast to the muted response the market garnered to headlines in 2017. Recent geopolitical risks including those related to tariffs (China, Canada, Mexico, Europe), North Korea, Iran, Eurozone, and various emerging markets, affected the appetite for risk assets, causing credit spreads to move wider rather suddenly, only to reverse when the initial pressures subsided. At the same time, the directional difference seen in investment grade and high yield credit spreads (measures of credit and liquidity premiums over the risk-free rate)—with investment grade spreads creeping wider, contrasting with high yield spreads narrowing after market pressures subside—speaks to a broader market discussion around appetite for risk and fears that we may be at or near the top of this current expansionary phase. Although high yield offers attractive yields compared to alternatives, the extra return above investment grade counterparts has reduced in recent months, and the risks for downside have risen. The lack of bondholder protection has been an oft-cited reason we may see additional pain in the next selloff. In our commentary on leveraged loans and collateralized loan obligations from May 7, we highlighted the expansion of the leveraged loan market. More recently, the amount of leveraged loans outstanding surpassed the U.S. high yield bond market, topping $1 trillion, as primary market activity has blossomed with
Industry-specific risk looms on the horizon, though negative headlines will be masked by positive catalysts due to tax reform and general economic optimism through year end. Pockets of softer data in retail, autos, commodities, and industrials will be outweighed by the current momentum brought on by a relaxed regulatory environment and notable shifts in policies out of Washington to help banks and other financial institutions, causing a broader multiplier effect. Other areas to monitor include the telecom and health care sectors, in which larger companies are blurring the lines between subsectors with large-scale acquisitions. While Moody’s and S&P project U.S. default rates declining through year end, the uptick through April owed to a rise in defaults in the retail and print/publishing industries, along with lingering issues in energy, add some caution to the generally positive economic outlook.
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Chart 5: We Anticipate Investment Grade and High Yield Credit Spreads to Continue Widening from the Narrows Recorded in January
(Source: Janney ISG; Bloomberg Barclays Indices; a/o 06/14/2018)
Themes in Mortgages, Agencies, et al. Because of the many uncertainties in the global markets—fiscal policies, geopolitical risks, and monetary policies—diversification is key for individual investors. Portfolios that reduce concentration in certain segments of the market will be able to withstand possible changes that occur. Such a thought process is factored into our view for investing in mortgages, agencies, and other parts of fixed income. Heightened scrutiny and regulation in mortgage banking,
plus low-rate fueled prepayments, led to a shift in mortgages toward improved underlying credit quality. That said, extension risk in the face of potentially rising rates, coupled with increased supply due to a lack of Federal Reserve bond buying, may put pressure on the space. Still, we see it as an area of opportunity outside of the heavily-focused corporate bond space. Further, we see agencies adding value above treasuries with a similar level of credit risk. Like agencies, certificates of deposit may be a good area to park sidelined cash while investors get a better feel for Federal Reserve policy and the direction of macro headwinds. While we recommend TIPS as a part of a diversified portfolio, the current breakeven level (as of writing) compared to consumer price index data (e.g., CPI-U) as a monitor of entry point is not compelling. The emerging markets, like high yield corporates, continue to attract investors, but the situation is country specific. While we suggest investors take a more global look for their fixed income portfolios, the recommendation is not a catchall for every corner of the world.
Chart 6: Only High Yield Corporates Experienced Positive Returns Year-to-Date, Thanks to the Equities Markets Bloomberg/Barclays Returns Index YTD 3yr 5yr 2017 2016 2015 2014 U.S. Aggregate (2.2%) 4.8% 9.8% 3.5% 2.6% 0.5% 6.0% U.S. Treasury (1.9%) 2.7% 5.7% 2.3% 1.0% 0.8% 5.1% U.S. Municipal (0.6%) 8.8% 16.5% 5.4% 0.2% 3.3% 9.1% U.S. IG Corporate (3.5%) 9.1% 16.4% 6.4% 6.1% (0.7%) 7.5% U.S. HY Corporate 0.6% 17.4% 30.0% 7.5% 17.1% (4.5%) 2.5% U.S. MBS (1.7%) 3.9% 9.9% 2.5% 1.7% 1.5% 6.1% Euro Aggregate (0.6%) 5.7% 17.5% 0.7% 3.3% 1.0% 11.1% Asian Pacific Aggregate (0.1%) 4.4% 13.0% 1.6% 2.1% (0.1%) 6.3% Global Infl-Linked (1.8%) 7.2% 8.9% 8.7% 3.9% (5.0%) 3.4% Source: Janney ISG; Bloomberg/Barclays Indices; a/o 06/14/2018
Municipal Markets By Alan Schankel, Municipal Strategist
The December 2017 passage of the Tax Cuts and Jobs Act (TCJA) set the tone for municipal bond markets in the first half of 2018. The foremost and most obvious impact of the TCJA was the ensuing drop in new issue volume, resulting from the tax bill’s elimination of tax-free borrowing for advance refunding purposes. Through May, total municipal issuance was 22% behind the same period in 2017, marking the slowest start for munis in four years. Partially offsetting this drop in supply is the
2013 (2.0%) (2.7%) (2.6%) (1.5%) 7.4% (1.4%) 2.2% 3.8% (3.2%)
YTD Spread Chg 6 bps -1 bps N/A 21 bps -14 bps 4 bps 20 bps 0 bps N/A
reduction in demand based on lower corporate tax rates. Although the magnitude was uncertain, most observers believed bank and insurance company appetite for tax-free income would diminish after the tax bill’s reduction of the corporate rate to 21% from 35%. Recently released data from the Federal Reserve confirms that bank holding of municipal debt fell by 2.8% in the first quarter of this year versus the prior quarter, the first quarterly decline in bank holdings of munis since 2009. At year end, banks held 15% of the $3.9 trillion of municipal debt outstanding, which is up from the 7% owned by banks in 2010, illustrating the key demand side
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Chart 7: Increases in Bank Muni Holdings Have Largely Offset Declines in Household Demand Holders (billions of $) 4Q 2010 1Q 2018 2010% 2018% Households 2,083 1,641 53% 42% Mutual Funds 963 950 24% 25% Insurance Companies 470 520 12% 13% Banks/Depository 257 577 7% 15% Other 181 176 5% 5% Total 3,954 3,864 100% 100% Source: Federal Reserve
role played by banks prior to December’s tax reform package. Insurance company municipal positions were little changed (13% of munis outstanding), but we expect some reductions going forward. Looking ahead, we see municipal market stability in coming months, supported by $140 billion of cash for reinvestment from redemptions (calls and maturities) in the June to September timeframe. Municipal to Treasury ratios (AAA tax-free yield divided by same maturity Treasury yield), key indicators of municipal bond relative value, are at the low end of their five-year range. The 10-year Municipal/Treasury ratio was most recently 82.9% (as of 6/11/18), below last year’s average ratio of 88.8% and well below the 92.6%
average of the past five years. This suggests that there is less downside than upside to ratios in coming months, so investors should consider municipal purchases when ratios are moving higher within short-term cycles. Despite the somewhat lower marginal federal tax rates of the TCJA (top bracket to 37% from 39.6%), we expect individual demand for tax frees to remain solid. As noted in our recent report, Taxable Equivalent Yield and the Tax Free Advantage, municipal bond yields remain highly competitive with taxable fixed income alternatives. Barring a BABs (Build America Bonds) like infrastructure plan from D.C., or some other federal encouragement (including financing support), we expect volume to continue to run behind levels of recent years. A silver lining to reduced issuance is that, despite drops in overall volume, the new money portion (financing of new projects) actually increased by 18% through May—an indication that, despite lack of federal leadership and resources, state and local governments are attending to some infrastructure needs.
Disclosures
Definition of Ratings
This is for informative purposes only and in no event should be construed as a recommendation by us or as an offer to sell, or solicitation of an offer to buy, any securities. The information given herein is taken from sources that we believe to be reliable, but is not guaranteed by us as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. Employees of Janney Montgomery Scott LLC or its affiliates may, at times, release written or oral commentary, technical analysis, or trading strategies that differ from the opinions expressed here.
Overweight: Janney ISG expects the target asset class or sector to outperform the comparable benchmark (below) in its asset class in terms of total return.
Returns reflect results of various indices based on target allocation weightings. Weightings are subject to change. Index returns are for illustrative purposes only and do not represent the performance of any investment. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indexes are unmanaged, and you cannot invest directly in an index.
Benchmarks
Performance data quoted represents past performance and is no guarantee of future results. Current returns may be either higher or lower than those shown. This report is the intellectual property of Janney Montgomery Scott LLC (Janney) and may not be reproduced, distributed, or published by any person for any purpose without Janney’s prior written consent. This presentation has been prepared by Janney Investment Strategy Group (ISG) and is to be used for informational purposes only. In no event should it be construed as a solicitation or offer to purchase or sell a security. The information presented herein is taken from sources believed to be reliable, but is not guaranteed by Janney as to accuracy or completeness. Any issue named or rates mentioned are used for illustrative purposes only and may not represent the specific features or securities available at a given time. Preliminary Official Statements, Final Official Statements, or Prospectuses for any new issues mentioned herein are available upon request. The value of and income from investments may vary because of changes in interest rates, foreign exchange rates, securities prices, and market indices, as well as operational or financial conditions of issuers or other factors. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. We have no obligation to tell you when opinions or information contained in Janney ISG presentations or publications change.
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Marketweight: Janney ISG expects the target asset class or sector to perform in line with the comparable benchmark (below) in its asset class in terms of total return. Underweight: Janney ISG expects the target asset class or sector to underperform the comparable benchmark (below) in its asset class in terms of total return. Asset Classes: Janney ISG ratings for domestic fixed income asset classes including Treasuries, Agencies, Mortgages, Investment Grade Credit, High Yield Credit, and Municipals employ the “Barclays U.S. Aggregate Bond Market Index” as a benchmark. Treasuries: Janney ISG ratings employ the “Bloomberg Barclays U.S. Treasury Index” as a benchmark. Agencies: Janney ISG ratings employ the “Bloomberg Barclays U.S. Agency Index” as a benchmark. Mortgages: Janney ISG ratings employ the “Bloomberg Barclays U.S. MBS Index” as a benchmark. Investment Grade Credit: Janney ISG ratings employ the “Bloomberg Barclays U.S. Credit Index” as a benchmark. High Yield Credit: Janney ISG ratings employ the “Bloomberg Barclays U.S. Corporate High Yield Index” as a benchmark. Municipals: Janney ISG ratings employ the “Bloomberg Barclays Municipal Bond Index” as a benchmark. Analyst Certification We, Mark Luschini, Guy LeBas, Jody Lurie, and Alan Schankel, the Primarily Responsible Analysts for this report, hereby certify that all views expressed in this report accurately reflect our personal views about any and all of the subject sectors, industries, securities, and issuers. No part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
