Capital Markets: Winter 2019

​ Sanguine About Slowing

Not Signaling Recession

• Recent economic statistics are materially stronger than those prior to previous recessions

• Relevant metrics indicate continued expansion

= Recessionary

= Expansionary

Data Preceding U.S. Recessions

Leading Economic Indicator YoY

Yield Curve (Min Past 18- Months)

ISM Manufacturing New Orders

Jobless Claims YoY

Real Fed Funds Rate

Capacity Utilization

-2.1%

-0.4%

48.0

3.1%

85.5%

10.2%

December 1969

-1.6%

-1.4%

65.2

4.4%

88.7%

1.4%

November 1973

-5.8%

-1.7%

47.1

6.0%

84.3%

15.9%

January 1980

-1.6%

-1.9%

47.6

10.1%

80.5%

-21.4%

July 1981

-0.9%

0.0%

46.7

3.9%

82.8%

8.0%

July 1990

-7.6%

-0.6%

41.5

3.1%

77.9%

41.8%

March 2001

-4.6%

-0.6%

46.5

2.0%

81.1%

7.8%

December 2007

-3.5%

-0.9%

48.9

4.7%

83.0%

9.1%

Average

5.2%

0.2%

51.1

0.6%

78.5%

-8.5%

Present

Source: FactSet and Alger. Recessionary thresholds are as follows: Leading Economic Indicator YoY <0.0%; Yield Curve (10 year minus 3 month) <0.0% in past 18 months; ISM Manufacturing New Orders <50; Real Federal Funds Rate >1.75%; Capacity Utilization >80%; Jobless Claims >0%.

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