Epstein Secrets

de LGEN LN, Citi downgrade SW FP, ALV GY • Danske upgrade ROCKB DC, DBK upgrade EBS AV, RBI AV, MAQ downgrade SVT LN ••• GS upgrade European Banks, Telecoms, UK Homebuilders, downgrade European Media, Industrials, Chemicals ••• HSBC downgrade ML FP, SIX2 GY, initiate ARM LN (ow), upgrade PC IM, • Nordea

ss Claims / PPI @ 8:30am, Markit US PMI @ 8:58am, Bloomberg Economic Expectations & Consumer Comfort @ 9:45a

anagement. The MEGA Trends Index (MLDIMEGL Index,=+7.5% YTD), also clearly shows US equity sectors outperforming fixed i=come sectors. Techs (XLK), Telecoms (XTL), together with Healthcare (XLV) are the three sectors with strongest price momentum in the MEGA Tren=s Index. Health Care is the one sector wi

e in the China monetary conditions index =CHBGMCI Index) since June last year. The question is can the fixed income c=rves handle the pressure? The Bloomberg chart below shows a rising BAML MO=E Index versus VIX Index is strongly correlated to rising US Bank stocks, while detrimental to fixed income. EFT

y-1 6 Jun-16 Jul-16 Aug-16 Sep-1 6 Oct-16 Source: Bloomberg Bankof America 2 European Equity Strategy |O01 Dec

clawed back around 2/3 of their underperformance vs Defensives. Of course it depends how you frame the question since we have included Utilities and Telecoms in the defensive basket. But when we downgraded Banks 10 days or so ago they had outperformed Food and Beverage by ~50% since the lows of early July.