Epstein Secrets

(China —5%) A continued profit recession, Foreign Cons Disc Cons Staples Energy Financials Health Care Industrials Tech Materials Telecom Utilities S&P 500 per share Avg oil price Euro Avg FF rate US UE yr end US GDP Global GDP Source: Deutsche Bank Sales % Profits % 27% 28% 41% 18%

5 $50 $55 $60 $65 $70 $75 $80 Figure 4: Brent now expected to settle at —$50 at 2016 EFTA01476308 end and stay under $60 even by 2018 end Brent futures prices over time $40 $45 $50 $55 $60 $65 $70 $75 $80 Dec 2015 Dec 2016 Source: Bloomberg Finance LP, Deutsche Bank Dec 2017 Dec

ime $35 $40 $45 $50 $55 $60 $65 $70 $75 $35 $40 $45 $50 $55 $60 $65 $70 $75 $40 $45 $50 $55 $60 $65 $70 $75 $80 Figure 4: Brent now expected to settle at —$50 at 2016 EFTA01476308 end and stay under $60 even by 2018 end Brent futures prices over time $40 $45 $50 $55 $

YID Equity Sector Performance' Energy Materials Industrials Discretionary Staples Healthcare rmancials Information Tech. Telecormimications Utilities Overall •Lawdaneturrn as el Al 10.2014 Sauce: J.P. Wigan 1.36 101 1/1 0.94 2.22 6.15 1021 2.12 1.34 102 1.71 0.92 2.30 6.20 1000 2.

ll as weaker supply growth, largely in Iraq and Libya. • Recent reports of a peace agreement in Libya between the rebels and the government caused Brent to fall by around 5%. We think a quick and full recovery in production is unlikely and we also think overall production capacity is now lower due t

alth Care Consumer Staples Financials Financials IT Cons Discretionary Industrials Industrials Financials Industrials Financials Telecome Utilities IT Cons Discretionary Health Care IT Consumer Staples Utilities Industrials Utilities Consumer Staples Financials EFTA01470806 28 Secto

a Delta One note or Total Return Swap Source: Bloomberg Finance LP, Deutsche Bank Research European Oil Sensitivity Basket Outperforms market when Brent rises (1) For additional detail on basket holdings please see Appendix Deutsche Asset & Wealth Management For Internal Use Only 22 EFTA0147079

and Industrials worry us a great deal. Most of the rest of the market, both the S&P and the Russell 2000, seem fully valued except a few big Banks, Utilities, Airlines, and some of our specific stock picks. EFTA01476108 Fortunately, Health Care and Tech represent 35% of the S&P 500. These two sectors d

hen modelled OPEC production of 32.4 mmb/d matches our calculated call on OPEC (i.e., the volume required from OPEC It o balance demand). Oil at a Brent price of USD45/bbl is below the 2016 national budget breakeven level for all of the ten countries assessed by our EMEA macro team, and also below t

gure 17: EM versus DM by sector — P/BV (x) and RoE (%) Sector Financials Energy Materials Consumer Discretionary Consumer Staples Industrials Utilities Telco Information Technology Healthcare AGGREGATE EM P/BV (x) EM ROE (%) 1.46 0.94 1.35 2.24 3.82 1.47 1.06 2.39 2.08 3.90 1.59 13.8

re 70). Turkey along with India has the highest sensitivity to lower oil prices of any of the global equity markets in our view (Figure 71), so if Brent does finally move to a lower level in 2014, that would provide additional justification to overweight the market. Political factors have clearly e

0/110% corridor variance Buy NKY Jun17-Jun18 18,500 strike FVA Long Russell 2000 vs. short S&P 500 Dec-18 var spread Buy 1x Jun17 64 call on Aug17 Brent futures, sell 1x SXEP Jun17 330 call Buy SPX 6m ATM call contingent on GLD 5% higher in 3m Long NKY - SPX Dec-18 corridor var replication Buy NDX To

BofA ML turned neutral in EM in the short-term Close positions from trades that have benefited thus far from the rally in Financials and weakness in Utilities; monetize view that Fed will not hike in September Take advantage of low near term vol and a steep term structure Unwind Oct/Jan spread and maintai