uity Insights 10 EPS tracker: Good EPS beats, lots of sales misses; sales down y/y, but margin expansion helped EPS up y/y 487 companies or 98% of S&P EPS reported. Wok beat on EPS with a wtd avg beat of 6.2% (6.7% ex Fin), but only 32% beat on sales with a wtd avg miss of -1.0% (-1.4% ex Fin). The wt

rrection Buy the dig, but stick with strength. Secular growth of Tech & Health Care Catchng a falling knife> PE expansion s rare as the Fed hikes S&P EPS growth after the super.cycle The Seven Spans: Interest Rates, Oil Pnces & the Doran' 2Q EPS finishes with S&P at its top Good reasons to return to

20 November 2015 US Equity Insights 5% delineates healthy from unhealthy S&P EPS growth and supports an 18 PE Our 1 year target of 18x trailing S&P EPS uses a 5.5% real and 7.5% nominal CoE. EPS is retained, so real EPS g must = real CoE - div yld to justify PE = 1/real CoE. [Figure 40: S&P fair va

cheap stocks left: But what if the yield curve goes flat> 2015's S&P 500 tug-of-war intensifies: Dimmer EPS vs brghter PE outlook The Hulk flexes, S&P EPS shrinks Is S&P ready for Fed hikes) 10 FAOs Reaching for small caps. selecuvehn Prefer small Retailers vs. small Banks Tech Titans can overcome th

cheap stocks left But what if the yield curve goes fat? 2015's S&P 500 tug-of-war intensifies: Dimmer EPS vs. brighter PE outlook The Hulk flexes, S&P EPS shrinks Is S&P ready for Fed hires?. 10 FAOs US equity strategy 2016 Outlook • char/Ivor puiecorwir — °MICA@ Bent Date 1-Feb-16 24-Jan-16 18

cheap stocks left But what if the yield curve goes fat? 2015's S&P 500 tug-of-war intensifies: Dimmer EPS vs. brighter PE outlook The Hulk flexes, S&P EPS shrinks Is S&P ready for Fed hires?. 10 FAOs US equity strategy 2016 Outlook • char/Ivor puiecorwir Sant Detesr.A. Ewa Date 1-Feb-16 24-Jan-16

strong enough to withstand a rate hike this year. U.S. Equity Insights — David Bianco, U.S. Equity Strategist, explains the reasoning behind his 5% S&P EPS growth estimate for 2016. DB Special Report — FX Strategists George Saravelos and Robin Winkler show that their "Euroglut" hypothesis, first introd

ed by Health Care and big consumer oriented Tech firms. We expect growth to slow at these two S&P segments, but remain key growth drivers. II2016E S&P EPS of $125 is up 5% on 4% sales growth, flat margins and 1% share shrink. Sales should turn positive in 2016 as commodity and currency drags diminish

8 to $125 on stronger dollar, lower oil assumptions We have long cautioned that every 10% appreciation in the dollar vs. mature currencies drags on S&P EPS growth by 2.5%. Every dime the Euro declines vs. USD hits S&P EPS by $1. Every $5/bbl oil price decline hits S&P EPS by $1, net of small benefits

heap stocks left: But what if the yield curve goes flat? 2015's S&P 500 tug-of-war intensifies: Dimmer EPS vs. brighter PE outlook The Hulk flexes, S&P EPS shrinks Is S&P ready for Fed hikes?: 10 FAQs Reaching for small caps, selectively: Prefer small Retailers vs. small Banks Tech Titans can overcome