Capital Markets: Observations & Insights

Growth Sectors Are the Cheapest to Bond-like Equities in 20 Years! ​ Growth vs. Bond-like Equities

• Bond-like stocks, such as Utilities and Consumer Staples, are expensive compared to their historic averages

Overvalued Bond-Like Equities

32.0%

28.0%

Widest Spread in 20 Years!

24.0%

20.0%

16.0%

Undervalued Growth Sectors

12.0%

8.0%

4.0%

0.0%

P/E Relative to 20-Year Median

-4.0%

-8.0%

-12.0%

Utilities Consumer Staples

Materials Financials Telecom Industrials Consumer Disc.

Health Care

Technology

Source: FactSet, June 30, 2016. Note: energy P/E is very high relative to history and not meaningful.

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