Economic Outlook
for
2014 and Beyond
Mike PeQueen CFA CFP
PeQueen, CFA,
HighTower Las Vegas
2360 Corporate Circle, Suite 1...
Global Macro Themes
China Slower Growth & Reform
US Energy Boom
US Recovery Continues
Europe Fragile Recovery
Japan Reflat...
As the World Turns

3
Real GDP Growth
China
US
Brazil
Canada
UK
Germany
Japan
J
Euro Area
Spain
Greece
Source: Bloomberg

2013 A
7.6
1.7
17
2.5
...
2014 Y
Year E d F
End Forecasts
t
US 10 Year T-Note
T Note
US Unemployment

Current
2.7%
2 7%
7.3%

Euro – US Dollar
1.34
...
China
Slower Growth
Market – Oriented Reforms

6
US E
Energy B
Boom

7
King Dollar
Abe’s Weak Yen Policy
+ Wh t
Whatever-It-Takes Policy E
It T k P li Europe
+ EM Slower Growth Era
+ US Energy ...
US Macro Themes
Energy Boom
Fed Tapering
p
g
Improving Employment
Housing Recovery
g
y
Consumer Deleveraging Almost Comple...
US E
Energy B
Boom

10
US Natural Gas Production

11
12
Employment Improvement

13
Housing R
H
i
Recovery

14
Deleveraging Over?
Household debt as a % of total assets

15

Source: US Federal Reserve
Household debt service costs
H
h ld d bt
i
t

16

Source: US Federal Reserve
US Household Net Worth

17

Source: US Federal Reserve
US Household balance sheet
Assets

$83.7 trillion

Liabilities

$13.4 trillion

Real Estate
Financial
Durable goods
g
Othe...
Municipal Revenue

19

Source: Lord Abbett
Low Inflation

20
Health Care Costs

21
China’s Impact on US Inflation
China’s Slower Growth =
Lower Commodity Prices =
Lower US Inflation =
Stronger US Purchasin...
23
US B d t D fi it
Budget Deficit

24
Corporate Financial Actions
High Cash Level
+ Low Growth
+ Shareholder Activism
M&A
Buybacks
y
Dividend Increases
25
Redefining Ri k
R d fi i
Risk
CDS 5-Year Spreads
Exxon

10

Merck

10

Disney

13

Johnson & Johnson

17

Google

22

Wal-...
Great Rotation

nd
2

Inning

Mutual Fund Flows June – Sept 2013 ($B)
p
($ )

Equity
Domestic International Bond
(1.6)
36....
Our View
US Dollar
US Stocks
Gold
Commodities
Bonds
Emerging Markets Equities
28
How Are Family Offices
Allocated?
Equities
Fixed Income
Less Liquid / Alternatives
Cash
C h

25%
17%
19%
39%
100%

Average...
The Dollar Rises

30
“If we are in a bubble, it’s the weirdest
bubble I have ever seen, where
everybody hates everything.
everything.”
- Mark A...
Asset Allocation
Inflection Point

32
Thank You
Mike PeQueen, CFA CFP
Mik P Q
CFA,
Managing Director, Partner
2360 Corporate Circle, Suite 160
Henderson, NV 890...
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What to Expect in the Year Ahead - Presentation: Mike PeQueen, HighTower Advisors - Private Wealth Management Summit 2014

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For more information contact: emailus@marcusevans.com

Mike PeQueen from HighTower Advisors and a Speaker at the marcus evans Private Wealth Management Summit held in Las Vegas, NV Dec 8-10, delivered his presentation entitled "What to Expect in the Year Ahead: The Global Market Outlook for 2014".

Join the 2014 Private Wealth Management Summit along with leading regional investors in an intimate environment for a highly focused discussion on the latest investment strategies in the market.

For more information contact: emailus@marcusevans.com

Published in: Economy & Finance, Business
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What to Expect in the Year Ahead - Presentation: Mike PeQueen, HighTower Advisors - Private Wealth Management Summit 2014

  1. 1. Economic Outlook for 2014 and Beyond Mike PeQueen CFA CFP PeQueen, CFA, HighTower Las Vegas 2360 Corporate Circle, Suite 160 Henderson, NV 89074 (702)567-5100
  2. 2. Global Macro Themes China Slower Growth & Reform US Energy Boom US Recovery Continues Europe Fragile Recovery Japan Reflation Experiment Emerging M k t Under P E i Markets U d Pressure Stronger Dollar 2
  3. 3. As the World Turns 3
  4. 4. Real GDP Growth China US Brazil Canada UK Germany Japan J Euro Area Spain Greece Source: Bloomberg 2013 A 7.6 1.7 17 2.5 1.7 1.4 0.5 1.9 -0.4 -1.3 13 -4.0 2014 E 7.5 2.6 26 2.5 2.3 2.3 1.7 1.55 1.0 0.45 0 45 -0.35 2015 E 7.2 3.0 30 2.9 2.5 2.3 1.75 1.2 1.4 1.1 11 1.4 4
  5. 5. 2014 Y Year E d F End Forecasts t US 10 Year T-Note T Note US Unemployment Current 2.7% 2 7% 7.3% Euro – US Dollar 1.34 US Dollar – Japanese Yen 98 British Pound – US Dollar 1.61 US Dollar – Swiss Franc 0.92 0 92 Source: BAML RIC Report YE2014 4.0% 4 0% 7.0% 1.25 108 1.56 1.04 5
  6. 6. China Slower Growth Market – Oriented Reforms 6
  7. 7. US E Energy B Boom 7
  8. 8. King Dollar Abe’s Weak Yen Policy + Wh t Whatever-It-Takes Policy E It T k P li Europe + EM Slower Growth Era + US Energy Boom + 2014 Fed Tapering Stronger US Dollar 8
  9. 9. US Macro Themes Energy Boom Fed Tapering p g Improving Employment Housing Recovery g y Consumer Deleveraging Almost Complete State / Local Government Spending Low Inflation Mid-Term Elections Improving Budget Deficit I i B d t D fi it Corporate Financial Actions 9
  10. 10. US E Energy B Boom 10
  11. 11. US Natural Gas Production 11
  12. 12. 12
  13. 13. Employment Improvement 13
  14. 14. Housing R H i Recovery 14
  15. 15. Deleveraging Over? Household debt as a % of total assets 15 Source: US Federal Reserve
  16. 16. Household debt service costs H h ld d bt i t 16 Source: US Federal Reserve
  17. 17. US Household Net Worth 17 Source: US Federal Reserve
  18. 18. US Household balance sheet Assets $83.7 trillion Liabilities $13.4 trillion Real Estate Financial Durable goods g Other $20.7 trillion $57.7 trillion $4.9 trillion $.04 trillion Mortgage debt Consumer credit Other $9.4 trillion $2.8 trillion $1.2 trillion Net worth $70.3 trillion 18 Source: US Federal Reserve Q1-2013
  19. 19. Municipal Revenue 19 Source: Lord Abbett
  20. 20. Low Inflation 20
  21. 21. Health Care Costs 21
  22. 22. China’s Impact on US Inflation China’s Slower Growth = Lower Commodity Prices = Lower US Inflation = Stronger US Purchasing Power = Stronger US Economy = g y 22
  23. 23. 23
  24. 24. US B d t D fi it Budget Deficit 24
  25. 25. Corporate Financial Actions High Cash Level + Low Growth + Shareholder Activism M&A Buybacks y Dividend Increases 25
  26. 26. Redefining Ri k R d fi i Risk CDS 5-Year Spreads Exxon 10 Merck 10 Disney 13 Johnson & Johnson 17 Google 22 Wal-Mart 22 Germany UK US Switzerland Japan France Spain S i Italy Greece 23 28 31 34 54 58 182 205 736 26 Source: Bloomberg
  27. 27. Great Rotation nd 2 Inning Mutual Fund Flows June – Sept 2013 ($B) p ($ ) Equity Domestic International Bond (1.6) 36.9 (117.3) Money Market y 75.0 27
  28. 28. Our View US Dollar US Stocks Gold Commodities Bonds Emerging Markets Equities 28
  29. 29. How Are Family Offices Allocated? Equities Fixed Income Less Liquid / Alternatives Cash C h 25% 17% 19% 39% 100% Average Expected Return More likely 8% 4.4% 29 Source: Citi Private Bank
  30. 30. The Dollar Rises 30
  31. 31. “If we are in a bubble, it’s the weirdest bubble I have ever seen, where everybody hates everything. everything.” - Mark Andreesen 31
  32. 32. Asset Allocation Inflection Point 32
  33. 33. Thank You Mike PeQueen, CFA CFP Mik P Q CFA, Managing Director, Partner 2360 Corporate Circle, Suite 160 Henderson, NV 89074 (702)567-5100 www.hightowerlasvegas.com MPeQueen@HighTowerAdvisors.com

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