CHIEF INVESTMENT OFFICE

Capital Market Outlook

January 27, 2025

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

IN THIS ISSUE MACRO STRATEGY 

Macro Strategy—Fed Policy Not Restrictive, But More Balanced Growth Needed Irene L. Peters, CFA®
Director and Senior Macro Strategy Analyst
Longer Term: The economy has entered 2025 with great momentum, confirming the
favorable signals coming all along from narrowing credit spreads as well as our view that policy MARKET VIEW 
is closer to neutral than the Federal Reserve (Fed) has been assuming. Growth and inflation
dynamics remain consistent with a “Goldilocks” environment typical of the middle of the Emily Avioli
Vice President and Investment Strategist
business cycle, when risk assets tend to outperform. Despite some wavering into 2025,
markets appear to agree, with Equities buoyed by optimism about the durability of the Jordy Fuentes
expansion and a strong earnings growth outlook. Wealth Management Analyst

The midcycle phase tends to be the longest part of the cycle, spanning about eight years THOUGHT OF THE WEEK 
before the pandemic abruptly brought the previous expansion to an end, for example. Still,
Kirsten Cabacungan
there are some risks and imbalances that bear watching. Inflation remains above the Fed’s 2% Vice President and Investment Strategist
target, with upside risks if the Fed overstimulates the economy given ebullient recent business
sentiment surveys, surging household net wealth, and unrestrained discretionary government MARKETS IN REVIEW 
spending. Also, the dollar has become extremely overvalued, typically a headwind for
domestic/global manufacturing as well as international trade. More balanced growth both here Data as of 1/27/2025,
and abroad will likely become necessary to extend the expansion. and subject to change

Market View—Time to Focus on Fundamentals: While Equities have since clawed back
losses, the early-year market churn generated a sense of unease among investors after a Portfolio Considerations
prolonged period of tranquility. We’re bracing for more uncertainty surrounding headline
Investors should consider a more
risk, potential new policy initiatives, and geopolitical tensions—all of which could lead to
diversified approach to Equities in the
choppiness within a broader uptrend. Investors should be prepared to tune out the noise
coming year as the more highly
and stay grounded in fundamentals. In that spirit, a survey of the current environment
valued areas share some of the
suggests that key macro and market indicators are still sound: The economic growth
spotlight with the rest of the market
backdrop is solid, inflation is still in the low single digits, earnings are increasingly
in 2025.
supportive, and technicals look healthy. Our view is that Equities can continue to add to
gains this year and that the long-term secular bull market is set to continue. If there’s This month, we adjusted our U.S.
volatility on the way, the best course of action might be to take a step back and remember Equity sector views, with a
to stay committed to a long-term, disciplined investment process. downgrade of Healthcare to neutral
Thought of the Week—U.S. Consumer Checkup: The consumer closed out 2024 on solid from slight overweight, and in turn we
footing. The Atlanta Fed GDPNow Q4 consumer spending estimate has steadily increased reduce the magnitude of our
underweight to Consumer Staples
in the last few weeks from 3.2% on January 2 to a strong 3.8% as of the latest January 17
with an upgrade to slight
estimate update. Can the enduring strength of consumers, the U.S. economy’s primary
underweight.
growth engine, hold in 2025? The durability of spending momentum will likely depend on
healthy wage growth, low unemployment and layoffs, rising household net worth and Within Fixed Income, our highest
manageable household debt servicing levels. conviction call remains that the yield
curve will normalize by short rates
moving lower, and investors should
therefore consider moving out
investable cash into their strategic
duration target as cash yields are
likely to decrease from here, and the
Chartered Financial Analyst® and CFA® are registered trademarks owned by CFA Institute. backup in yields may be an
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Bank of America Corporation (“BofA Corp.”).
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Please see last page for important disclosure information. 7560753 1/2025
MACRO STRATEGY
Fed Policy Not Restrictive, But More Balanced Growth Needed Longer
Term Investment Implications
Irene L. Peters, CFA®, Director and Senior Macro Strategy Analyst
An extended midcycle tends to be
Recent data confirm our expectations for a return to “Goldilocks” economic conditions of risk-asset friendly. Equity market
moderate growth and inflation, a positive environment for risk assets. On the growth front, diversification to position for more
for instance, real gross domestic product (GDP) is estimated to have increased 3.0% in Q4 at balanced profits growth and price
an annualized pace, according to the Atlanta Fed, the third straight quarter of 3% growth. performance makes sense at this
Based on available data, the expansion remains driven by a solid 3.8% increase in consumer
point in the cycle but some
spending, with outlays on goods much above trend, rising by an estimated 6% in Q4.
imbalances bear watching.
The latest Fed Beige Book prepared for the January 28-29 rate-setting meeting indicates that
economic activity was the strongest in more than two years during the December to early
January period. Confirming the positive growth momentum, employment significantly exceeded
consensus expectations in December, keeping the unemployment rate low at 4.1%. Though still
concentrated in healthcare, education, leisure and hospitality, as well as state and local
government, sustained labor demand combined with still substantial aggregate household
excess savings and strong wealth effects are setting up growth for a healthy pace in 2025.
The new administration’s policies are expected to shift more job growth into the private
sector. Manufacturing employment and production may also finally come out of their long
rut since a number of manufacturing surveys have rebounded significantly in response to
the pro-growth agenda of the new administration and prospects for a broader-based
economic growth environment. The National Federation of Independent Business (NFIB)
survey of small-business sentiment surged in January on similar expectations.
Such rebalancing couldn’t come a day too soon. On average, real equipment investment
growth has been meager since 2019 and is estimated to have declined about 4% at an
annualized rate in Q4 (Exhibit 1). Industrial production has flatlined for 17 years.
Manufacturing employment also declined in December, capping a year of contraction. The
employment component of the Institute for Supply Management (ISM) manufacturing index
dipped further into contraction territory in December, signaling no hiring spree is in the
offing yet despite improving sentiment and a surge in its new orders subindex.
Exhibit 1: Real Business Investment Above 25-Year Trend But Focused On “Intangibles.”
Business Investment Adjusted for Inflation (deviation from 1995-2019 trend)
50% Total
Equipment
Intellectual property products (aka "intangibles")
30%

10%

-10%

-30%
1995 - Q1 1998 - Q1 2001 - Q1 2004 - Q1 2007 - Q1 2010 - Q1 2013 - Q1 2016 - Q1 2019 - Q1 2022 - Q1

Source: Bureau of Economic Analysis/Haver Analytics. Data as of January 20, 2025.

On the inflation side, progress toward the Fed’s 2% target has slowed in recent months. The
consumer price index (CPI) accelerated over the past six months, reaching a 4.8% annualized
monthly pace in December. This has turned the year-to-year rate higher to 2.9% from a cycle
low of 2.4% in September. That said, the reacceleration is largely due to idiosyncratic avian-flu-
related shortages as well as a recent spike in energy prices, which is unlikely to be sustained
given energy supply and demand trends discussed in our January 13, 2025, Capital Market
Outlook.
Inflation excluding the volatile food and energy components was much more encouraging,
and well received by financial markets. Indeed, “core” CPI slowed markedly from 3.8% at an
annualized pace in November to just 2.7% in December, its smallest monthly gain since

2 of 8 January 27, 2025 – Capital Market Outlook RETURN TO FIRST PAGE

July. This, combined with a meaningful deceleration in shelter inflation (likely with more to
come), suggests “core” inflation remains on track to ease from its still much above target
year-to-year December rate of 3.25%.
The U.S. thus appears to have found the delicate balance between growth and inflation as
the Fed successfully normalized rates. Still, this “not too hot, not too cold” midcycle
economy is not immune to risks. Inflation remains above the Fed’s 2% target, with upside
risks from potentially excessive Fed easing in the context of ebullient small business
sentiment, red-hot consumer spending, and strong wealth effects.
Also, fiscal deficits are massive, and real government spending is growing at double its
historical average pace. As discussed in our January 21, 2025, Capital Market Outlook, the
potential for sharply higher tariffs and risks of retaliation dampening exports and
economic growth is real. There’s even talk about possible government attempts to
deliberately weaken the dollar from its strongest level since 1985 in order to reduce the
trade deficit and bolster domestic growth and manufacturing capacity.
Trade deficits, manufacturing stagnation, extreme dollar appreciation, and uneven equity
market performance are reflective of U.S. asset-light business models, a big fiscal deficit, and
insufficient growth overseas. The relative outperformance of the U.S. economy, large interest-
rate differentials, and the appeal of unusually fast growth, free cash flow rich “magnificent”
mega caps have attracted massive capital from around the world into the U.S. This has
boosted the real trade-weighted dollar index by about 20% since 2020 and 40% over the past
decade to its highest level since the 1985 Plaza Accord, when a coordinated currency
intervention successfully depreciated the dollar to reduce a burgeoning trade deficit.
A strong dollar tends to be associated with weak U.S. and global manufacturing and trade.
Domestic manufacturing output and employment have stagnated for about 17 years, while
the trade deficit has increased both in absolute terms and as a share of real GDP. At the
same time, with profits and valuations highly skewed in favor of the asset-light technology
companies, high capital intensity has been an increasing headwind for stock performance,
further discouraging investment. According to Empirical Research Partners, this tends to
particularly be the case when the real interest rate increases, as has been the case over
the past year.
Moreover, technology companies’ profits are less cyclical and not as directly tied to
investment in tangible assets as those of the dominant industries of the past. While they
drive innovation and productivity, their asset-light growth model has restrained the
traditional cycle of investment, hiring, and GDP (Exhibit 1). Real and broader-based
benefits from Artificial Intelligence-related investment are needed on the productivity and
profits growth front across a broader spectrum of industries for a more balanced and
sustained expansion.
For this, the U.S. economy needs investment in domestic productive physical assets,
skilled labor, and infrastructure. Tariffs and coordinated efforts to depreciate the dollar
floated as a way to address the trade deficit would just address symptoms rather than the
causes of current imbalances.
Along with pro-business policies already proposed, a more sustainable, less disruptive, and
less risky approach to reduce trade deficits and boost domestic manufacturing would thus
focus on reducing the fiscal deficit, increasing domestic savings, investing in productivity-
enhancing infrastructure, workforce development, and innovation. This would boost
domestic supply and make U.S. products more competitive on the international market,
reducing the trade deficit. In turn, this would organically reduce capital inflows, easing
upside pressures on the dollar without tarnishing its position as a reserve currency and
global financial market anchor.
In the end, a central source of imbalance is the unusually large U.S. fiscal deficit. Lower
government deficits would go a long way toward restraining excess demand and its
spillover into large trade deficits counterbalanced by equally massive capital inflows. It
would also help bring inflation back to target. More domestic saving and investment would
reduce the “twin deficits” and boost domestic productive capacity and productivity. More
balanced growth overseas is also necessary to sustain growth and avoid the excesses that
may make future adjustments more painful than necessary. Reducing these imbalances is
the key to extending the current expansion for years to come.

3 of 8 January 27, 2025 – Capital Market Outlook RETURN TO FIRST PAGE

MARKET VIEW
Time to Focus on Fundamentals
Emily Avioli, Vice President and Investment Strategist
Portfolio Considerations
Jordy Fuentes, Wealth Management Analyst
The SP 500 initially stumbled into 2025, extending December’s -2.4% decline by falling an While risks remain, solid
additional -0.9% in the first two trading weeks of January. 1 While the “fizzle” environment fundamentals ultimately support
has since turned into a “sizzle,” with Equities clawing back losses, the early-year dip our positive bias for Equities this
generated a sense of unease among investors after a prolonged period of tranquility. To year. From a positioning
wit, the S&P 500 is up 58.0% over the last two years, representing a 90th percentile rally, 2 perspective, we emphasize the
and has not seen a 10.0% correction since October of 2023. importance of staying the course
and staying fully invested in a
We maintain a constructive outlook for 2025 and believe that Equities can add on to the diversified portfolio.
outsized gains of the past two years, but we’re also bracing for uncertainty surrounding
headline risk, potential new policy initiatives, and geopolitical tensions—all of which could
lead to choppiness within a broader uptrend. Dusting off the old volatility playbook,
investors should be prepared to tune out the noise and stay grounded in fundamentals. In
that spirit, a survey of the current environment suggests that key macro and market
indicators are still sound.

The economic growth backdrop is solid: The consumer spending engine continues to
power the U.S. economy. The December Retail Sales report showed that control group
sales, which exclude volatile components and feed into GDP calculations, saw a stronger-
than-expected 0.7% month-over-month (MoM) increase, compared to a 0.4% MoM
increase in November. Bank of America credit and debit card spending was up 2.2% year-
over-year (YoY) per household in December, marking the second-fastest pace of YoY
spending growth in 2024. While nuances remain, consumers generally remain well
supported by elevated net worth, solid wage growth, and a still-healthy labor market. On
that front, the U.S. economy added a greater-than-anticipated 256,000 jobs last month
and the unemployment rate unexpectedly ticked down to 4.1%. U.S. GDP is set to expand
at a healthy clip against this backdrop. The Atlanta Fed’s GDPNow estimate is tracking
growth of 3.0% for Q4 and we expect growth of 2.8% for 2024 and 2.4% for 2025
(Exhibit 2A).

Inflation is still in the low single digits: While the resilient economic backdrop has
stoked concerns about the path of inflation, the latest data should provide some degree of
reassurance. The December CPI report showed that headline inflation was in line with
expectations with accelerations of 2.9% YoY and 0.4% MoM. Core consumer prices, which
strip out components like food and energy, eased on a MoM basis for the first time in six
months (Exhibit 2B). Past episodes of inflation have seen more than one peak over a
multiyear time horizon—a risk we’re watching closely—but signs of a resurgence are
currently absent. Lower inflation allowed the Fed to cut interest rates by 100 basis points
in 2024. BofA Global Research believes the cutting cycle may be over, but investors are
still pricing in the possibility of additional easing in 2025. Our near-term base case is that
monetary policy will remain accommodative while inflation hovers in the low single digits,
creating a solid backdrop for Equities.

Earnings are increasingly supportive: Q4 2024 earnings season is off to a strong start,
with growth continuing to broaden beyond just the Information Technology and
Communication Services sectors. The Financials sector, for instance, is tracking a YoY
blended earnings-per-share (EPS) growth rate of 49% for Q4. 3 All 11 S&P 500 sectors are
expected to post positive YoY EPS growth by Q3 2025 for the first time since Q3 2021,
and nine sectors are expected to report double digit earnings growth by Q4 2025

1
Bloomberg. January 2, 2025.
2
BofA Global Research. January 2, 2025.
3
FactSet. January 22, 2025.

4 of 8 January 27, 2025 – Capital Market Outlook RETURN TO FIRST PAGE

(Exhibit 2C). Consensus is forecasting S&P 500 YoY EPS growth of 9.4% and 14.6% for
2024 and 2025, respectively. While profitability is still elusive for Small-caps, the outlook
for a potential earnings recovery has improved amid expectations for lower borrowing
costs and solid economic growth. Ultimately, continued earnings expansion should be a
key support for markets moving forward.

Market indicators look healthy: The strong fundamental backdrop is complimented by

solid technical indicators. The Chicago Board Options Exchange Volatility Index (VIX) briefly
spiked above 25 at the beginning of last month’s market consolidation but quickly fell back
below its five-year average (Exhibit 2D). The S&P 500 has continued to trade comfortably
above its 200-day moving average, which remains in an uptrend. Credit markets are not
showing signs of stress, successfully shrugging off the recent choppiness. While certain
breadth indicators have shown some deterioration, other gauges of market health have
mostly held up. We interpret this as a positive sign that the recent churn was not likely a
prelude to a broader sell-off.

Adding it all up, we believe that 2025 will be a solid year for markets and that the long-
term secular bull market is set to continue. That said, we see potential for more short-
term market swings. While risks related to geopolitics, monetary and fiscal policy, and
inflation are certainly worth monitoring, we encourage investors to cut through the noise
and focus on fundamentals. The best course of action during periods of market turbulence
is often to take a step back and remember to stay committed to a long-term, disciplined
investment process.

Exhibit 2: The Fundamental Backdrop Looks Solid.

2A) Estimates call for strong GDP growth. 2B) Recent inflation data has been encouraging.
Real U.S. GDP Estimates (% Quarter-over-Quarter annualized) Change in core CPI (Seasonally Adjusted) (MoM) (%)
3 2.8 0.5
2.5 2.4 0.4 0.4 0.4
2.3 2.2 2.2 0.4
0.3 0.3 0.3 0.3 0.3
2 0.3
0.2 0.2 0.2
0.2
0.1
1 0.1

0.0
0
Q1 2025E Q2 2025E Q3 2025E Q4 2025E 2024E 2025E

2C) Broadening earnings expansion is supportive. 2D) The VIX remains relatively subdued.
Q4 '24 Q1 '25 Q2 '25 40
Estimated YoY EPS Growth for S&P 500

50
40 Q3 '25 Q4 '25 VIX Index 5-Year Average
30 35
20
10 30
Sectors (%)

0
VIX Level

-10 25
-20
-30 20
-40
Health Care

Industrials
Consumer Staples

Utilities
Energy

Financials

Information Tech.
Comm. Services

Consumer Disc.

Materials

Real Estate

15

10

Exhibit 2A) E=Estimate. Source: BofA Global Research. January 17, 2025. Exhibit 2B) Source: FactSet. January 17, 2025. Exhibit 2C) Source: FactSet. January 17, 2025. Exhibit 2D) Source:
Bloomberg. January 17, 2025. It is not possible to invest directly in an index. Please refer to index definitions at the end of this report. Past performance is no guarantee of future results.

5 of 8 January 27, 2025 – Capital Market Outlook RETURN TO FIRST PAGE

THOUGHT OF THE WEEK
U.S. Consumer Checkup
Kirsten Cabacungan, Vice President and Investment Strategist Portfolio Considerations
As a new year, new administration and the potential for a new monetary policy stance take Given that consumer spending
form, an important question for the outlook emerges: Can the enduring strength of accounts for roughly 70% of GDP,
consumers, the U.S. economy’s primary growth engine, hold? the strength of the U.S. economy
The consumer closed out 2024 on solid footing. According to Bank of America aggregated relies on the health of the
credit and debit card data, spending per household was up 2.2% YoY in December. 4 That consumer. The outlook for U.S.
marked the second fastest month of YoY spending growth for all of 2024 and a strong economic growth remains positive
pickup from November. December retail sales told a similar story as sales in the retail core
as solid wage growth and
control group, the measure of retail sales that strips out volatile components and directly
employment conditions underpin
feeds into GDP calculations, advanced by the strongest pace in three months. 5 To add, the
Atlanta Fed GDPNow Q4 consumer spending estimate has steadily increased in the last few consumer spending momentum.
weeks from 3.2% on January 2 to 3.8% as of the latest January 17 estimate update, which is
slightly above third quarter consumer spending at 3.7% and the most since early 2023. 6
Over the last few years, consumption has held up solidly even amid tests from elevated price
pressures, labor market softness, high borrowing costs, heightened geopolitical uncertainty
and U.S. election volatility. The durability of spending momentum should persist as long as
the factors underpinning the consumer remain in place (Exhibit 3) including a combination of
healthy wage growth, low unemployment and layoffs, rising household net worth and
manageable household debt servicing levels. Positive incoming data so far suggest early
signs that the consumer should be on track to support solid economic growth this year.
Exhibit 3: The U.S. Consumer Remains Healthy.
3A) Household purchasing power remains supported as wage 3B) A cooling in the hiring rate has not translated into weaker
growth continues to outpace inflation. consumer spending, with layoffs historically low.
10% U.S. Hires Rate Seasonally Adjusted (LHS)
U.S. Average Hourly Earnings Seasonally Adjusted U.S. Layoffs and Discharge Rate Seasonally Adjusted (RHS)
(year/year%) 5.0% 3.5%
Consumer Price Index Non-seasonally Adjusted 9.0% 6.1%
(year/year%) 3.0%
5%
4.0% 2.5%
2.0%
0%
3.0% 1.5%
1.0%
-5% 2.0% 0.5%
2001
2002
2003
2004
2006
2007
2008
2009
2011
2012
2013
2014
2016
2017
2018
2019
2021
2022
2023
2024
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

3C) Household net worth close to eight times disposable income due 3D) Household balance sheets also look to be in good shape with overall
to strong financial and real estate asset gains is a tailwind for debt servicing ratios low even amid a moderate shift up since the
confidence and consumption. trough during the pandemic.
850% 14%
800% U.S. Household Net Worth as a % of Disposable Personal Income U.S. Household Debt Service Ratio
13%
750%
700% 12%
650% 11%
600%
10%
550%
500% 9%
450% 8%
1946
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
2015
2018
2021
2024

1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024

Exhibit 3A) Sources: Bureau of Labor Statistics; Bloomberg. Data as of January 22, 2025. Exhibit 3B) Sources: Bureau of Labor Statistics; Bloomberg. Data as of January 22, 2025. Exhibit 3C)
Sources: Federal Reserve; Bloomberg. Data as of January 22, 2025. Exhibit 3D) Shading represents a recession. Sources: Federal Reserve; Bloomberg. Data as of January 22, 2025.

4
BofA Global Research, “Consumer Checkpoint: Resolute in the new year?”, January 10, 2025.
5
U.S. Census Bureau. Data as of January 22, 2025.
6
Federal Reserve Bank of Atlanta. Data of January 22, 2025.

6 of 8 January 27, 2025 – Capital Market Outlook RETURN TO FIRST PAGE

MARKETS IN REVIEW

Equities Economic Forecasts (as of 1/24/2025)

Total Return in USD (%)
Q4 2024E 2024E Q1 2025E Q2 2025E Q3 2025E Q4 2025E 2025E
Current WTD MTD YTD
Real global GDP (% y/y annualized) - 3.1* - - - - 3.2
DJIA 44,424.25 2.2 4.5 4.5
Real U.S. GDP (% q/q annualized) 2.0* 2.8* 2.5 2.3 2.2 2.2 2.4
NASDAQ 19,954.30 1.7 3.3 3.3
CPI inflation (% y/y) 2.7 3.0 2.6 2.6 3.0 2.7 2.7
S&P 500 6,101.24 1.8 3.8 3.8
Core CPI inflation (% y/y) 3.3 3.4 3.0 2.9 3.2 3.1 3.0
S&P 400 Mid Cap 3,275.64 1.1 5.0 5.0
Unemployment rate (%) 4.2 4.0 4.3 4.3 4.4 4.4 4.4
Russell 2000 2,307.74 1.4 3.5 3.5
Fed funds rate, end period (%) 4.33 4.33 4.38 4.38 4.38 4.38 4.38
MSCI World 3,856.78 2.1 4.1 4.1
MSCI EAFE 2,360.81 3.2 4.4 4.4
The forecasts in the table above are the base line view from BofA Global Research. The Global Wealth & Investment
MSCI Emerging Markets 1,090.02 1.9 1.5 1.5 Management (GWIM) Investment Strategy Committee (ISC) may make adjustments to this view over the course of the
year and can express upside/downside to these forecasts. Historical data is sourced from Bloomberg, FactSet, and
Fixed Income† Haver Analytics. There can be no assurance that the forecasts will be achieved. Economic or financial forecasts are
Total Return in USD (%) inherently limited and should not be relied on as indicators of future investment performance.
A = Actual. E/* = Estimate.
Current WTD MTD YTD
Sources: BofA Global Research; GWIM ISC as of January 24, 2025.
Corporate & Government 4.80 0.15 0.12 0.12
Agencies 4.63 0.09 0.22 0.22
Municipals 3.76 0.26 -0.05 -0.05 Asset Class Weightings (as of 1/7/2025) CIO Equity Sector Views
U.S. Investment Grade Credit 4.92 0.11 0.09 0.09 CIO View CIO View
International 5.35 0.25 0.21 0.21 Underweight Neutral Overweight
Asset Class Sector Underweight Neutral Overweight
High Yield 7.23 0.33 1.16 1.16 slight over weight green

Equities    
Financials
slight over weight green

   
90 Day Yield 4.30 4.30 4.31 4.31 Slight over weight green

U.S. Large-cap    
Consumer
2 Year Yield 4.27 4.28 4.24 4.24 Slight over weight green
slight over weight green

   
U.S. Mid-cap     Discretionary
10 Year Yield 4.62 4.63 4.57 4.57 slight over weight green

U.S. Small-cap    
slight over weight green

30 Year Yield 4.85 4.86 4.78 4.78 Slight underweig ht orange

Utilities    
International Developed    
Information Neutral yellow

   
Neutral yellow

Commodities & Currencies Emerging Markets     Technology

slight underweig ht orange

Total Return in USD (%) Fixed Income     Communication Neutral yellow

   
Commodities Current WTD MTD YTD U.S. Investment- neutral yellow

   
Services
grade Taxable Move d from slight over weight to Neutral yellow

Bloomberg Commodity 250.60 -0.2 5.0 5.0

International
neutral yellow

   
Healthcare    
WTI Crude $/Barrel†† 74.66 -4.1 4.1 4.1 Slight underweig ht orange

Industrials
Neutral Yellow

   
Global High Yield Taxable    
Gold Spot $/Ounce†† 2770.58 2.5 5.6 5.6 Neutral yellow

U.S. Investment-grade Neutral Yellow

    Real Estate    
Total Return in USD (%) Tax Exempt slight underweig ht orange

Slight underweig ht orange

Energy    
Prior Prior 2022 U.S. High Yield Tax Exempt     slight underweig ht orange

Materials    
Currencies Current Week End Month End Year End Alternative Investments*
Hedge Strategies Consumer
Neutral

EUR/USD 1.05 1.03 1.04 1.04

Move d from full underweig ht to Slight und erweight orange

Private Equity & Credit

Neutral

Staples    
USD/JPY 156.00 156.30 157.20 157.20
Private Real Estate
Neutral

USD/CNH 7.24 7.34 7.34 7.34 Tangible Assets

Neutral

Cash
S&P Sector Returns *Many products that pursue Alternative Investment strategies, specifically Private Equity and Hedge Funds, are available
only to qualified investors. CIO asset class views are relative to the CIO Strategic Asset Allocation (SAA) of a multi-asset
Communication Services 4.0%
portfolio. Source: Chief Investment Office as of January 7, 2025. All sector and asset allocation recommendations must be
Healthcare 3.0% considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all
Industrials 2.4% recommendations will be in the best interest of all investors.
Information Technology 1.9%
Financials 1.2%
Real Estate 1.2%
Consumer Staples 1.1%
Utilities 0.9%
Consumer Discretionary 0.8%
Materials 0.7%
Energy -2.9%
-4% -2% 0% 2% 4% 6%

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

1/20/2025 to 1/24/2025. †Bloomberg Barclays Indices. ††Spot price
returns. All data as of the 1/24/2025 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 market-capitalization-weighted index that is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers
approximately 80% of available market capitalization.
Institute for Supply Management (ISM) manufacturing index is a monthly economic indicator that measures the health of the US manufacturing sector.
Consumer Price Index measures the average change in prices paid by consumers over time for a basket of goods and services.
Real trade-weighted dollar index compares the value of the dollar against the currencies of countries with which each of the 50 U.S. states trades.
Chicago Board Options Exchange Volatility Index a popular measure of the stock market's expectation of volatility based on S&P 500 index options.

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