Very early signs point to a possible economic recovery: - The Harpex Shipping Index has bottomed out in late January. - The Bloomberg Base Metal Spot Price Index has gained 6.8% this year. - The Baltic Dry Index has started ticking higher. Analysts have lowered their earnings estimates for S&P 500 companies in the first quarter of 2019 by 6.5%, more than the average 2.4% reduction over the past 5 years. Earnings are expected to decline 3.4% overall but rise 1% for companies generating over 50% of sales inside the US and fall 11.2% for companies generating under 50% of sales inside the US. Revenue growth is estimated at

1. March 19,2019
ACCJ BANKING, FINANCE & CAPITAL MARKETS COMMITTEE MEETING
ExeTrust Co., Ltd.
Shige Kawata
1
Goldilocks again? 9/20
2930
12/24 2351
Very early signs of a possible economic recovery?
*Harpex Shipping Index bottomed in late January.
*Bloomberg Base Metal Spot Price Index has gained 6.8% this year.
*The Baltic Dry Index has started ticking higher
10 Year Treasury Note ‘14/3-’19/3 past 5 years
2018-2019
Dow S&P500 Nasdaq Nasdaq100
2018/9/20 (Thu.) High 26,657 2,931 8,028 7,569
2018/2/24 (Mon.) Low 21,729 2,351 6,193 5,899
Decline (%) -18.5% -19.8% -22.9% -22.1%
Latest (3/19) 25,914 2,833 7,714 7,326
(12/24→3/19) 19.3% 20.5% 24.6% 24.2%
% to September high 2.9% 3.5% 4.1% 3.3%
3/19 2833
‘18/11/8 3.24%
‘19/3/19 2.601%
‘16/7/8 1.355%
3.0%
2.5%
2.0%
1.5%

2. 1 2
The estimated earnings decline for the
S&P 500 for Q1 2019 is -3.4%.
For companies that generate ＞ 50% of
sales inside the U.S.=+1.0%.
For companies that generate l＜50% of
sales inside the U.S＝-11.2%.
During the first 2 months of 1Q, analysts lowered
earnings estimates for companies in the S&P 500 for the
Q→dropped by 6.5%
*past 5 years (20 Qs), →2.4%.
*past 10 years, (40 Qs)→2.8%.
*past 15 years, (60 Qs)→2.9%.
The estimated revenue growth rate for
the S&P 500 for Q1 2019 is 4.9%.
For companies that generate ＞50% of
sales inside the U.S., ＝6.5%.
For companies that generate ＜50% of
sales inside the U.S., ＝＋0.7%.
’15 1Q -8% ’16 1Q ＞-8%
’19 1Q -6.5%