硅谷銀行-2024年第三季度經(jīng)濟(jì)報(bào)告（英）-29正式版-WN8

QuarterlyEconomicReport3rdQuarter2024SVBAssetManagementviewsoneconomicandmarketfactorsaffectingglobalmarketsandbusinesshealthQCuliacrktetorlyedEictoMnaosmteicrtRitelepostrytlePublishedinQ32024|DataforQ220243Overview4DomesticEconomy10ForeignExchange13CentralBanksandMonetaryPolicy17CorporateBondMarket21MarketsandPerformanceOverviewKeyTakeawaysTheFOMCmaintainsthefedfundsratefortheseventhconsecutivemeeting.AtitsJunemeeting,thecommitteereviseditsfedfundstargetexpectationsto5.1%from4.6%,implyingonlyoneratecutfor2024.?TheFederalOpenMarketCommittee(FOMC)continuedtoholdthefedfundsratesteadyatarangeof5.25%to5.50%atitsJunemeeting.ThecommitteeupdateditsfedThelabormarketshowsearlysignsofsoftening.Theunemploymentrateincreasedfrom3.8%attheendofMarchto4.1%attheendofJune.Thesestatisticsarehigherthanayearearlier,whenthejoblessratewas3.6%.fundsforecasttoone25-basispoint(bps)ratecutin2024.Inflationhasbeenonthedecline.?TheFOMCnoted“modest”progresshasbeenmadetowardits2%inflationobjective.ChairmanJeromePowellreinforcedthattheywouldliketoseemoredatatobeconfidentthatadeclineininflationissustainable.Corepersonalconsumptionexpenditures(PCE)—theFederalReserve’spreferredinflationindicator—rose2.6%onayear-over-year(YoY)basis,whichisdownfrom4.2%inJune2023.Loweryieldsareexpectedforcentralbanks.Centralbanksexpectationspointtoloweryieldsinlate2024andinto2025,withtheexceptionofAsianormalizinghigherovertime.??WhilethelabormarketandGDPremainsolid,therehavebeenindicationsofweakeningfromahistoricallystrongposition.TheUSDslidesdownwardafterthefirsthalfof2024.AstheFedprovidesclarityonitsmonetarypolicyandmarketspriceinratecutsin2024and2025,narrowerinterestratedifferentialswillputpressureontheUSD.Consumersentimentreportsreflectthatconsumersremaincautious,andwillcontinuetobeinfluencedbyinflationaswellastheuncertaintyaboutthestrengthofthelabormarket.Fixedincomeyieldshavereboundedsincethebeginningof2024.Thefirsthalfof2024sawshorter-durationgovernmentbondsbenefitfromtheFed’sactionofkeepinginterestrateshigher.Tightercreditspreadshavehelpedcorporatebonds,inparticular,highyield(HY),whichoutperformed.QUARTERLYECONOMICREPORT|#0724-0105TD-0630253DomesticEconomyUnemployment:OntheRiseAmidstSlowingJobCreationInQ22024,theaveragenumberofjobsgrewbyapproximately177,000permonth.Theunemploymentrateincreasedfrom3.8%attheendofMarchto4.1%attheendofJune.AsmeasuredinMay,therecontinuetobemorejobsavailable(~8.1million)thanunemployedAmericans(~6.6million).ThenumberofunemployedAmericansrosefurtherinJuneto~6.8million.Non-FarmPayrollsUnemploymentRate1,20015.012.510.07.590060030005.04.12.5-3000.0JobOpeningsandLaborTurnoverHireRateQuitRateJobOpeningsRateJobOpenings(RightAxis)8.07.06.05.04.03.02.01.00.014,00012,00010,0008,0006,0004,0002,0000Source:USBureauofLaborStatistics,BloombergandSVBAssetManagement.Dataasof07/08/2024.QUARTERLYECONOMICREPORT|#0724-0105TD-0630255Consumption:ContinuedFlatteningofConsumerSpendingRetailsalesexcludingvehicleshaveremainedrelativelyflatfromQ12024toQ22024,asconsumersslowdownontheirspendinginthecurrentrateandinflationenvironment.VehiclesalessawadownturninJune,dippingtoJanuarylevels.Thisisinkeepingwiththeoscillatingtrendsseenin2023.RetailSalesExcludingVehiclesVehicleSales800700600500400300200100-25232119171513119752003200420052006200720082009201020112012201320142015201620172018201920202021202220232024Source:BloombergandSVBAssetManagement.Dataasof07/08/2024.QUARTERLYECONOMICREPORT|#0724-0105TD-0630256Inflation:OntheDeclineCorePCECorePCEFEDAIT*AverageHourlyEarningsInflationhasslowlytrendeddownwardwiththeJune2024consumerpriceindex(CPI)dippingto3.0%YoY.CorePCE—theFed’spreferredinflationindicator—rose2.6%YoY,whichisdownfrom4.2%inJune2023.9.08.07.06.05.04.03.02.01.00.03.9Inadditiontomarketforecasts,theFedcontinuestoreiteratethatitexpectsinflationtodeclineinto2025.2.62.0200720082009201020112012201320142015201620172018201920202021202220232024CPIBreakdown(MoMChange)**FoodAwayfromHomeGasoline(AllTypes)NaturalGas(Piped)AllItemsLessFoodandEnergyCommoditiesLessFoodandEnergyMedicalCareServicesLessEducationandCommunicationAllitemsFoodFoodatHomeEnergyElectricityApparelNewVehiclesShelterMedicalCareCommoditiesEnergyJun-243.00%May-243.30%Apr-243.40%Mar-243.50%Feb-243.20%Jan-243.10%Dec-233.40%Nov-233.10%Oct-233.20%Sep-233.70%Aug-233.70%Jul-233.20%2.20%2.10%2.20%2.20%2.20%2.60%2.70%2.90%3.30%3.70%4.30%4.90%1.10%1.00%1.10%1.20%1.00%1.20%1.30%1.70%2.10%2.40%3.00%3.60%4.10%4.00%4.10%4.20%4.50%5.10%5.20%5.30%5.40%6.00%6.50%7.10%1.00%3.70%-2.50%2.20%4.40%5.90%5.10%5.00%3.60%3.80%3.30%3.40%2.40%2.60%2.10%3.00%3.70%0.20%3.30%3.40%3.60%3.80%3.80%3.90%3.90%4.00%4.00%4.10%4.30%4.70%-1.80%-1.70%-1.30%-0.70%-0.30%-0.30%0.20%0.00%0.10%0.00%0.20%0.80%0.80%0.80%1.30%0.40%0.00%0.10%1.00%1.10%2.60%2.30%3.10%3.20%-0.90%-0.80%-0.40%-0.10%0.40%0.70%1.00%1.30%1.90%2.50%2.90%3.50%3.10%3.10%2.50%2.50%2.90%3.00%4.70%5.00%4.70%4.20%4.50%4.10%5.10%5.30%5.30%5.40%5.20%5.40%5.30%5.50%5.50%5.70%5.90%6.10%5.20%5.40%5.50%5.70%5.70%6.00%6.20%6.50%6.70%7.20%7.30%7.70%3.30%3.10%2.70%2.10%1.10%0.60%-0.50%-0.90%-2.00%-2.60%-2.10%-1.50%0.70%0.50%0.40%0.20%0.40%0.00%-0.10%-0.10%0.90%1.00%1.00%1.20%2.60%1.20%-1.90%-3.20%-8.80%-17.80%-13.80%-10.40%-15.80%-19.90%-16.50%-13.70%2.10%1.30%-1.90%-4.60%-2.00%-5.40%-4.50%-0.50%-3.60%-12.50%-3.90%-6.40%-1.90%-8.90%-5.30%3.00%-3.30%-19.90%Source:Bloomberg,USBureauofLaborandStatisticsandSVBAssetManagement.Dataasof07/11/2024.*FEDAITisaverageinflationtargeting.TheCPImeasurestheweightedaveragepricechangeinthepricespaidbyconsumersforhouseholdgoodsandservices.**Month-over-month.QUARTERLYECONOMICREPORT|#0724-0105TD-0630257Housing:SalesSlumpasPricesRiseHousingMarketTotalSales(NewandExisting)ExistingHomeSupply9.08.07.06.05.04.03.02.01.00.014.012.010.08.0InspiteofexistinghomesupplyincreasingduringQ22024,risingmedianhomepriceshavepusheddowntotalhomesales.Meanwhile,mortgagerateshadsteadilyfallensincepeakinginApril,butappeartobebouncingbackupsincemid-June.Thisisexpectedtofurtherreducehome6.04.02.00.0affordabilityforbuyers.HomePricesMedianHomePriceFHFAPurchase*Case-Shiller20-City**450.0400.0350.0300.0250.0200.0150.0100.050.00.0200420052006200720082009201020112012201320142015201620172018201920202021202220232024Source:BloombergandSVBAssetManagement.Dataasof07/08/2024.*FederalHousingFinanceAgency.**TheCase-Shiller20-Citymeasuresthepricesofresidentialrealestatein20majorUSmetropolitanareas.QUARTERLYECONOMICREPORT|#0724-0105TD-0630258BusinessOutlook:ModeratingBusinessConfidenceIndex(BCI)USBCIAverage10310210110099BusinesssentimentcontinuedtohoverbelowaverageinQ22024,flatteningaftermonthsofslowlyimproving.InstituteforSupplyManagement(ISM)datahasindicatedthatUSmanufacturinghasbeencontractingthroughoutQ2,duetoweakdemandandsubsequentlydecliningoutputinahighinflationenvironment.9897969520082009201020112012201320142015201620172018201920202021202220232024BusinessSentimentNewYorkFedEmpireManufacturingSurveyKansasCityFedManufacturingSurveyRichmondFedManufacturingSurveyISMManufacturingDallasFedManufacturingSurveyPhillyFedManufacturingSurveyISMNon-ManufacturingPMISAJun-24May-24Apr-24Mar-24Feb-24Jan-24Dec-23Nov-23Oct-23Sep-23Aug-23Jul-23Jun-23May-23Apr-23Mar-23Feb-23Jan-23Dec-22Nov-22Oct-22-15.1-19.4-14.5-14.4-11.3-27.4-10.4-21.4-20.6-19.2-18.5-21.2-24.4-30.1-24.1-16.7-14.5-8.51.34.515.53.2-6.0-15.6-14.3-20.9-2.4-43.7-14.59.1-4.61.9-19.01.1-8.0-2.0-8.0-10.00.0-7.0-11.0-5.0-15.0-11.0-5.03.048.548.749.248.853.849.451.452.653.450.552.551.953.454.152.853.651.052.351.255.054.749.055.254.7-7.0-4.0-9.0-1.0-2.0-6.0-7.00.0-9.0-11.0-2.0-9.0-1.0-2.0-2.0-5.0-2.0-1.050.347.849.147.146.646.948.647.646.546.446.647.046.547.747.448.148.950.05.2-10.6-12.8-8.0-12.1-13.47.7-14.2-13.6-10.0-26.3-22.4-17.8-9.8-15.2-17.0-9.95.0-7.0-9.0-8.0-10.0-12.0-8.0-14.0-7.0-4.0-7.0-9.06.6-31.810.8-24.6-5.8-32.9-11.24.5-20.9-16.0-20.8-9.1Source:Bloomberg,OrganizationforEconomicCo-operationandDevelopment(OECD,2022)andBCI(indicator).Updated07/08/2024.Heatmapcolorsarebasedontheindicesandtimeperiodsshownandsummarizebusinessplansforeconomicactivities.FortheFedsurveys,thenumberrepresentsbusinesssentiment,withthehighernumberrepresentinghigherbusinesssentiment.ForISMindices,theneutralnumberisusually50.>50,theeconomyislikelytoexpand;<50,theeconomyislikelytocontract.QUARTERLYECONOMICREPORT|#0724-0105TD-0630259ForeignExchangeUSDResumesItsDownwardSlideastheFedProvidesClarityonMonetaryPolicyAfterastronghalfoftheyear,theUSDreverses.TheUSDhascloselytrackedFedratecutexpectations.H12024H22024No.ofFedcutsprojectedforJan2025(leftaxis)DXYUSDindex(rightaxis)TaiwaneseDollarIndianRupee-5.3-0.4-0.20-1-2-3-4-5-6-7-810810610410210098-0.2SouthKoreanWonChineseRenminbiCanadianDollarNewZealandDollarSwissFranc-6.40.10.20.30.40.5-2.3-3.2-3.6-6.4-4.9SwedishKronaSingaporeDollarAustralianDollarEuro0.81.11.7-2.6-2.1-3.01.81.9JapaneseYen-12.3BritishPound-0.72.73.04.04.95.9BrazilianReal-13.2MexicanPesoIsraeliShekel-7.4-4.2ColombianPeso-7.2-10.096%-15.0-5.00.05.010.0Jun-23Aug-23Oct-23Dec-23Feb-24Apr-24Jun-24Currencyperformancevs.theUSD(percent)through07/12/2024.ProjectedUSratecutsdeterminedfromfedfundfuturesmarketpricing.Source:Bloomberg.QUARTERLYECONOMICREPORT|#0724-0105TD-06302511NarrowerInterestRateDifferentialsWillWeighontheUSDWithmarketspricingintwofullratecutsin2024anduptofourmorein2025,theUSinterestrateadvantageisprojectedtonarrowordisappearaltogether,puttingdownwardpressureontheUSD.CurrentProjected2024Year-EndUSPolicyRateAdvantageUSPolicyRateAdvantageCountryPolicyRatePolicyRateUnitedStatesAustraliaCanada5.50%4.35%4.75%3.75%0.10%5.50%1.25%5.25%--4.47%4.38%4.10%3.20%0.29%4.60%0.95%4.69%--1.15%0.75%1.75%5.40%0.00%4.25%0.25%0.09%0.37%1.27%4.18%-0.13%3.52%-0.22%EurozoneJapanNewZealandSwitzerlandUKProjectedpolicyratesaccordingtofuturesmarketsforUSandAustralia,andovernightindexedswap(OIS)marketsforallothercurrencies.Source:Bloomberg.Dataasof07/12/2024.QUARTERLYECONOMICREP1O2RT|#0724-0105TD-06302512CentralBanksandMonetaryPolicyShort-EndInterestRatesRatecuttiminghasbeendelayeduntillate2024aspersistentinflationforcestheFedtokeeprateshigherforlonger.Q42022:TheFedreducedthepaceofratehikesfrom75bpsto50bpsinDecember,asinflationshowedsignsofabatingandthemarketexpectedafairlystablefedfundsratein2023.1-YearUSTYield2-YearUSTYieldFedFundsMidpoint5.505.255.004.754.504.254.003.753.503.253.002.752.502.252.001.751.501.251.000.750.500.250.005.385.12Q22023:TheFeddelivereditsfirstpauseinratehikesforthecycle.Inflationmateriallyimproved,andtheFedcitedthe“l(fā)ageffect”oftheratehikes’impactontheeconomy.4.71Q32023:TheFedpausedagaininSeptemberaseconomicprojectionsimprovedfor2023and2024.TheFedstatedthatitexpectedonemorehikein2023,butmarketoddsreflectedthatitmaybedone.Q42023:AnyexpectationsforfurtherratehikeswereeliminatedastheFedpointedtoacceleratingdisinflation.Ratecuttimingwaspulledforward,withtheFedpotentiallydeliveringthefirstcutduringthefirsthalfof2024.Q12024:Persistent,higher-than-expectedinflationpushedthetimingofFedratecutsintomid-2024asmarketpricingreducedratecutsfromsixtolessthanthreefortheyear.ThedotplotreiteratedtheFedstanceforthreecutsin2024.Q22024:ElevatedgrowthandstubborninflationforcedtheFedtoreviseratecuttimingtolate2024anddropthecutcountto1forthisyear.Theholdingpatternpersists,butthequantityofeasingexpectedthrough2026remainsunchanged.Source:Bloomberg,USTreasuryYieldandSVBAssetManagement.Dataasof06/30/24.QUARTERLYECONOMICREPORT|#0724-0105TD-06302514EconomicForecastsEconomicProjections202420252026UnitedStatesChangeinRealGDPCorePCE2.3%2.8%4.0%1.8%2.2%4.1%2.0%2.1%4.0%UnemploymentRateUnitedKingdomChangeinRealGDPCPI0.7%2.6%4.4%1.2%2.2%4.5%1.5%2.0%4.7%UnemploymentRateEurozoneChangeinRealGDPCPI0.7%2.4%6.5%1.4%2.1%6.5%1.3%2.0%6.5%UnemploymentRateJapanChangeinRealGDPCPI0.4%2.4%2.5%1.1%1.8%2.4%0.9%1.7%2.3%UnemploymentRateChinaChangeinRealGDPCPI5.0%0.6%5.1%4.5%1.5%5.1%4.2%1.9%5.0%UnemploymentRateSource:Bloomberg.Dataasof06/30/2024.QUARTERLYECONOMICREPORT|#0724-0105TD-06302515GlobalCentralBankExpectationsCentralbankexpectationspointtoloweryieldsinlate2024andinto2025,withAsianormalizinghigherovertime.GlobalCentralBankRateExpectationsUSDEURGBPJPYCNY6.255.254.253.252.251.250.25-0.75Jun-24Sep-24Dec-24Mar-25Jun-25Sep-25Dec-25Mar-26Jun-26Source:Bloomberg.Dataasof06/30/24.QUARTERLYECONOMICREPORT|#0724-0105TD-06302516CorporateBondMarketCorporates:NewIssueUpdateNewissuanceofinvestmentgrade(IG)corporatebondssawastrongstartin2024.Whileprimaryissuancehasmoderatedoverthepastfewmonths,itcontinuesgrowingatahealthyclip.Severalfactorshavebeendrivingtherobustissuancesofarthisyear.Earningshavebeenrelativelystrongonthewhole,andtherehasbeennorecession,despiteinterestratesthathaveremainedhigherforlonger.Whilefinancialsrepresentapproximately~40%ofIGbondissuance,non-financialsectorissuancehasbeengainingmomentumaswell,thanksinparttosignificantM&Aactivityinthehealthcaresector,whichhasbeendrivingnewissuance.Expectationsarerisingforadditionaldealsin2024,whichcouldpushoverallnewissuanceforecastsevenhigher,particularlywhencombinedwiththeneedtorefinancependingdebtmaturities.USIGCorporateNew-IssueVolumeIndustrialsFinancialsUtilities1,6611,5001,00050001,3111,1371,1541,1391,0631,084993921856857810815658659630508492372200620072008200920102011201220132014201520162017201820192020202120222023YTD2024IGCorporateNew-IssueSupply(Sector/Maturity)IGCorporateNew-IssueSupply(Rating/Maturity)IndustrialsFinancialUtilitiesAAAAAABBB1-5yr6-12yr13yr+$366.9$325.51-5yr6-12yr13yr+%5%17%6%6%15%16%38%30%41%47%47%47%$122.61-5yr6-12yr13yr+$556.71-5yr6-12yr13yr+2%6%16%7%38%30%44%39%$423.27%42%54%$159.41-5yr6-12yr13yr+$559.91-5yr6-12yr13yr+14%8%8%13%47%50%26%$398.015%11%10%66%$195.036%40%45%80%$Billions0%10%20%30%60%70%90%100%050100150200250300350400450500550600Source:BloombergFixedIncomeIndicesandBarclaysResearch.Dataasof06/30/2024.Pastperformanceisnotaguaranteeoffutureresults.Totalsmaynotaddupto100%duetorounding.QUARTERLYECONOMICREPORT|#0724-0105TD-06302518CreditMetricsRemainStable,DespiteHigherforLongerInterestRatesS&P500LeverageandDebtCoverageDebt/EBITDA*(LHS)FCF**/Debt8.07.06.05.04.03.02.01.00.018.0%16.0%14.0%12.0%10.0%8.0%Industrialcorporatecreditmetricsremainhealthy,despitetheongoingimpactofhigherinterestrates.Leveragecontinuestoremainathistoricallylowlevels,whiledebtcoveragehasstabilizedaftermilddeteriorationduring2022and2023.6.0%4.0%2.0%0.0%Shareholderspendingremainsmodestoverallandgenerallywellbelowfreecash-flowlevels.Whiledividendscontinuetorisemodestly,shareholderrepurchaseshavebeensignificantlycurtailed,helpingcorporateissuersmaintaintheirstrongcreditprofiles.Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22Jun-23Jun-24S&P500CapitalSpendingandDistributionDividendCapExBuyback120100806040200Increasedcapitalspendinghasbeguntolevelofffromrecentpeaks,givenelevatedborrowingcostsandongoingeconomicuncertainty.Capitalexpendituresandlong-terminvestmentsareexpectedtocontinuemoderatingthroughout2024,whichwillfurtherbolstercorporatecreditmetrics.Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22Jun-23Jun-24Source:Bloomberg.Dataasof06/30/2024.*Earningsbeforeinterest,taxes,depreciation,andamortization.**Freecashflow.QUARTERLYECONOMICREPORT|#0724-0105TD-06302519Corporates:SpreadandSectorPerformanceTheriskpremiumbetweenUSTreasuriesandUScorporatebondsremainsatsomeofthetightestlevelsinovertwoyears.Investordemandremainsstronggiventhepositiveimpactofhigheryields,whichhasbeendrivingspreadsincreasinglytighter,despiterelativelyheavynewsupplyduringthefirsthalfof2024.USIGCorporateBondIndices—SpreadstoUSTreasury1-10yUSCorporate1-10yUSFinancial1-10yUSIndustrial2001801601401201008060Operatingprofitability,asmeasuredbyEBITDAmargin,sawsignificantgrowthYoYinthetechnologyandtelecom/mediasectorsastheAIrevolutioncontinuestodriveincreasedprofitability.Utilitiesalsosawanincreaseinoperatingprofitabilitydueinparttorecordhighlevelsofrateincreasesduring2023,whichcontinuetoflowthroughmargins.MarginsacrosstheenergysectorfellYoYduetolowerprofitabilitywhencomparedtothesector’srecordoverallyearin2022andearly2023.S&P500EBITDAMargin(%)June2023June202428.2302010023.121.521.118.418.417.612.812.911.511.611.8Industrials10.88.99.28.16.95.7EnergyMaterialsConsumerDiscretionaryConsumerStaplesHealthcareInformationTechnologyTelecomServicesUtilitiesSource:BloombergandICEBofAIndices,S&P500Indices.Dataasof06/30/2024.QUARTERLYECONOMICREPORT|#0724-0105TD-06302520MarketsandPerformanceMarketSectorPerformanceDespiteconcernsabouthigherinterestrates,equitymarketsperformedimpressivelyinthefirsthalfof2024.Thiswasledbyarallyintechnologystocks,especiallythosebenefittingfromtheartificialintelligence(AI)boom.Somevolatilityininterestratesledtomodestnegativereturnsinlonger-termbonds.20142015201620172018201920202021202220232024YTDBiotech43.24%Biotech13.09%CrudeOil45.03%Biotech43.85%USTreasury0.86%Tech45.97%IPOIndex109.60%CrudeOil55.01%CrudeOil6.71%Tech52.75%Tech26.50%Tech14.23%Tech3.23%HighYield17.13%Tech39.65%USAggregate0.01%CrudeOil34.46%Biotech48.10%Tech28.73%HighYield-11.19%IPOIndex50.90%S&P50015.29%S&P50013.69%S&P5001.38%Tech12.27%IPOIndex35.75%HighYield-2.08%IPOIndex33.87%Tech42.64%S&P50028.71%USTreasury-12.46%S&P50026.29%CrudeOil13.80%USIGCorporate7.46%USTreasury0.84%S&P50011.96%S&P50021.83%USIGCorporate-2.51%Biotech32.34%S&P50018.40%HighYield5.28%USAggregate-13.01%HighYield13.45%IPOIndex7.06%IPOIndex7.17%USAggregate0.55%USIGCorporate6.11%CrudeOil12.47%S&P500-4.38%S&P50031.49%USIGCorporateUSIGCorporateUSIGCorporateUSIGCorporateBiotech3.95%9.89%-1.04%-15.76%8.52%USAggregate5.97%USIGCorporate-0.68%USAggregate2.65%HighYield7.50%Tech-6.02%USIGCorporate14.54%USTreasury8.00%USAggregate-1.54%S&P500-18.11%Biotech7.76%HighYield2.58%USTreasury5.05%HighYield-4.47%USTreasury1.04%USIGCorporate6.42%Biotech-14.99%HighYield14.32%USAggregate7.51%USTreasury-2.32%Biotech-25.62%USAggregate5.53%USIGCorporate-0.49%HighYield2.45%IPOIndex-7.98%IPOIndex-0.51%USAggregate3.54%IPOIndex-17.53%USAggregate8.72%HighYield7.11%IPOIndex-9.89%Tech-30.29%USTreasury4.05%USAggregate-0.71%CrudeOil-45.87%CrudeOil-30.47%Biotech-15.61%USTreasury2.31%CrudeOil-24.84%USTreasury6.86%CrudeOil-20.54%Biotech-20.38%IPOIndex-57.06%CrudeOil-10.73%USTreasury-0.86%Allreturnsaboveareonatotalreturnbasis.2024returnsareonanaggregatebasisthrough06/30/2024.USAggregatereferstoBloombergBarclaysAggregateBondIndex.USTreasuryreferstotheUSTreasuryallocationoftheBloombergBarclaysAggregateBondIndex.USIGCorporatereferstotheIGCorporateallocationoftheBloombergBarclaysAggregateBondIndex.HighYieldreferstotheUSCorporateHighYieldBloombergIndex.CrudeOilreferstotheSpotWestTexasIntermediateCrudeOil—Bloomberg-sourced.S&P500referstotheS&P500TotalReturnIndex.TechreferstotheS&PGlobal1200InformationTechnologyIndex.BiotechreferstotheS&PBiotechnologySelectIndustryIndex.IPOIndexreferstotheRenaissanceIPOIndex.Source:BloombergandBloombergBarclaysIndicesasof06/30/2024.Pastindexperformanceisnoguaranteeoffutureresults.QUARTERLYECONOMICREPORT|#0724-0105TD-06302522BondMarketPerformance2024YTDBondPerformanceICEBofA0-3MonthUSTreasuryBillIndexICEBofAUSHighYieldIndex2.7%2.6%TheFed’sactionofkeepinginterestrateshigherhascontributedtotheoutperformanceofshort-termUSTreasurybillsinthefirsthalfof2024.Meanwhile,tightercreditspreadshavehelpedthecorporatebondmarkets.Inparticular,highyield(HY)hasoutperformedbothlonger-termICEBofA1-3YearUSTreasuryIndexICEBofAUSInflation-LinkedTreasuryIndexICEBofAUSCorporateIndex1.2%0.9%0.0%ICEUSBroadMunicipalIndex-0.1%-0.5%-0.9%ICEBofAUSBroadMarketIndexICEBofAGlobalBroadMarketIndexgovernmentandIGbondsandhasenjoyedconsecutivequartersofpositivereturns.-2.0%0.0%2.0%4.0%BondYieldsFederalFundsTargetRate-UpperBound10-YearUSTreasury2-YearUSTreasury6.0%5.0%4.0%3.0%2.0%1.0%0.0%5.5%4.8%4.4%Sources:BloombergandICEBofAIndices.Asof06/30/2024.Indicesareunmanagedandcannotbeinvestedindirectly.Pastperformanceisnotaguaranteeoffutureresults.QUARTERLYECONOMICREPORT|#0724-0105TD-06302523GlobalandDomesticYieldsYieldsAcrosstheGlobeAverageCurrent6.05.04.03.02.01.00.0Fixedincomeyieldshavereboundedafterachallengingstarttotheyear,andhavestabilizedwithintheirrespectiveranges.InvestorshaveembracedtheFed’sassertivemonetarypolicystance,leadingtoenhancedfixedincomeyields.AnticipationofratecutsbytheFedhasledinvestorstocapitalizeonextendedperiodsofhigheryieldsinfixedincometosecureattractiveincome.USGermanyUKItalySpainJapanFranceCanadaBroadFixedIncomeYieldsShort-DurationYieldsAverageCurrentAverageCurrent8.06.04.02.00.010.08.06.04.02.00.01-3YearUSTreasuries1-3YearUSAgencies1-3YearCorporates<1YearCorporatesAAAAssetBackedUSTreasuries*USAgenciesCorporatesUSMBSUSABSUSCMBS*USTreasuriespertaintoon-the-runsovereign10-yearsecurities.Dailyyieldsfrom06/30/2023to06/30/2024.Sources:BloombergandICEBofAIndices.Indicesareunmanagedandcannotbeinvestedindirectly.Pastperformanceisnotaguaranteeoffutureresults.QUARTERLYECONOMICREPORT|#0724-0105TD-06302524QuarterlyCreditandDurationPerformanceStratificationTheFed’sdecisiontomaintainhigherratesinthefirsthalfof2024,coupledwithexpectationsofratecutslaterintheyear,ledtotheoutperformanceofshort-durationfixedincomeacrosstheentirecreditspectrum.CorporateCreditDurationAAAAA10-0.251.41%0.25-0.51.34%1.31%1.36%1.37%1.41%1.42%1.42%1.48%1.46%1.52%0.5-1.01.13%1.22%1.26%1.20%1.27%1.29%1.33%1.35%1.34%1.33%1.0-1.51.09%1.26%1.14%1.10%1.16%1.19%1.23%1.26%1.31%1.44%1.5-2.00.99%0.90%1.07%0.97%1.07%1.04%1.05%1.08%1.10%1.34%2.0-2.50.88%0.69%0.98%1.00%1.04%0.98%1.02%1.11%1.11%1.33%2.5-3.00.66%0.79%0.87%0.77%0.98%0.96%1.00%1.02%0.99%1.29%3.0-4.00.77%0.60%0.70%0.62%0.87%0.83%0.80%0.84%0.92%1.18%4.0-5.01.01%0.69%0.45%0.67%0.72%0.66%0.74%0.72%0.85%0.96%5.0-6.00.53%0.46%0.52%0.29%0.70%0.59%0.76%0.72%0.78%1.08%6.0-7.00.96%0.09%0.42%0.15%0.45%0.33%0.42%0.35%0.44%0.74%7.0-8.00.08%-0.01%0.18%-0.15%0.28%0.13%0.09%0.18%0.33%0.45%8.0-9.0-0.89%-0.61%-0.14%-0.37%0.80%0.15%-0.13%0.04%0.22%1.00%9.0-10.010.0-11.011.0-12.0Over12.0-0.92%-2.36%-0.47%-0.79%-0.01%-0.50%-0.19%0.00%0.02%0.26%-1.00%0.82%-0.71%-0.64%-0.34%-1.69%-0.55%-1.05%-1.32%-1.03%-0.62%-0.34%-2.73%-2.45%-1.89%-2.51%-2.09%-2.29%-2.19%-1.85%-1.74%-0.98%AA21.41%1.41%1.41%1.45%1.50%1.44%1.46%1.48%0.05%AA3-1.54%-0.41%-0.83%-0.94%-0.34%-0.58%-0.21%A1A2A3BBB1BBB2BBB3USTreasuriesDurationTreasury0-0.251.32%0.25-0.51.30%0.5-1.01.20%1.0-1.51.06%1.5-2.00.95%2.0-2.50.87%2.5-3.00.79%3.0-4.00.67%4.0-5.00.54%5.0-6.00.40%6.0-7.00.13%7.0-8.0-0.06%8.0-9.0-0.42%9.0-10.010.0-11.011.0-12.0Over12.0-1.10%-0.89%-0.75%-1.66%Percentagesintablerepresenttotalreturn.Redcellsindicatethelowestreturns,andgreencellsindicatethehighestreturns.Graycellsindicatetherewerenosecuritieswithinthespecificdurationrangefortheevaluationperiod.Sources:BloombergandICEBofAIndices.Performancedataasof06/30/2024.Pastperformanceisnotaguaranteeoffutureresults.QUARTERLYECONOMICREPORT|#0724-0105TD-06302525GlobalEquityPerformanceThestrongperformanceinbothdomesticandinternational