Capital Markets: Observations & Insights

Key Observations

• Global debt levels are high but servicing costs are manageable and delinquencies remain subdued • Monetary conditions are tightening but stocks and the economy should be able to absorb moderate increases in interest rates • Business spending has begun to accelerate and outpace the broader economy, driven by strong earnings growth, tax reform, solid business confidence, and accommodative lending conditions

Table of Contents

Degrees of Debt

Pages 3-8

Performance

Pages 9-15

Fundamentals

Pages 16-23

Valuation

Pages 24-28

Page 2