Slide 1: Capital Markets Review April 2023
April 2023 APRIL 2023 The opinions in this presentation are intended for general information only and are not intended to provide specific advice or recommendations for any individual or institution. See further disclosures on page 20.
Slide 2: Capital Markets Review contents
Capital Markets Review April 2023 3 Overview 10 US equity markets Snapshot of stocks, bonds and Price chart, performance by the economy sector and equity style 4 Growth and output 11 Global investing Economic growth, manufacturing International economics and and service output trends market performa
Slide 3: Overview: Market Recap and Economic Outlook
Capital Markets Review April 2023 Overview Market Recap U.S. stock indices posted positive returns in 1Q but it was not smooth sailing. The S&P 500 Index rose 7.5% for the quarter and the tech-heavy Nasdaq 100 soared 20.8%. Growth stocks trounced value for the quarter (Russell 1000 Growth: +14.4%; R
Slide 4: US Economic Growth
Capital Markets Review April 2023 US Economic Growth Economic momentum is slowing Increased risk of recession ▪ Real GDP growth was 2.6% annualized in the US real GDP growth (%) Leading Economic Indicator index (annual chg., %) fourth quarter, down from 3.2% in the prior quarter. Economic data have
Slide 5: Employment and Prices
Capital Markets Review April 2023 Employment Gradual slowdown in hiring Wage growth has cooled ▪ US payroll growth has moderated but continues to Nonfarm payrolls, m/m (000s) US average hourly earnings, y/y grow at a healthy pace. Nonfarm employment 1000 8% All employees increased by 236 thousand in
Slide 6: Consumer and Business
Capital Markets Review April 2023 Consumer Sentiment measures mixed Savings trending up ▪ The household savings rate has started to trend US personal savings, % of disposable income US consumer sentiment measures higher but is still at very low levels. Modest nominal 35 180 120 income growth and red
Slide 7: Interest Rates and Credit
Capital Markets Review April 2023 Interest Rates and Credit Recent rate rollercoaster ▪ After great volatility, the benchmark 10-year 10-year Treasury Bond yield (%) Treasury yield ended the quarter at 3.47%, 4.1 down 40bp from the start of the year. Soft-landing optimism Banking crisis January’s op
Slide 8: Bond Markets
Capital Markets Review April 2023 Bond Markets Bonds had a strong quarter All sectors were positive ▪ US fixed income markets have gotten off to a better Total returns by credit rating (%) Total returns by sector (%) start in 2023. The Bloomberg US Aggregate Bond Index returned 3%. As with equities,
Slide 9: Currencies
Capital Markets Review April 2023 Currencies Downtrend in the US dollar The Yen is well-below its 2012 high ▪ Since peaking in September 2022, the trade-weighted Dollar Spot Index (DXY) Yen/USD spot exchange rate US dollar has fallen by roughly 10%. While valuations are an important long-term driver
Slide 10: US Equities Valuations
Capital Markets Review April 2023 US Equities Valuations ▪ Risk assets broadly rose in the quarter with the S&P Strong mega-cap tech performance Gold hits aat1-year longer-term average high, then falls Select index performance (YTD, %) S&P 500 relative forward price/earnings ratio 500 increasing 7.5
Slide 11: World Stock Markets
Capital Markets Review April 2023 World Stock Markets Global market returns Global valuations look attractive ▪ Developed international markets outperformed the Selected global stock returns 1-yr, 3-month (%) Forward P/E ratios U.S. in 1Q. International equities delivered higher USA Global ex. US 30
Slide 12: Hawaii
Capital Markets Review April 2023 Hawaii Economic momentum is slowing Labor market normalizing ▪ Hawaii’s major economic indicators were mixed in the Hawaii economic indicators, y/y (%) Unemployment rate (%) first quarter, with most indicators reflecting slowing economic momentum. Worsening global m
Slide 13: Outlook
Capital Markets Review April 2023 Outlook Inflation: goods vs. services Underlying inflation rate ~5% ▪ The outlook for capital markets can be summed up PCE Core Services Less Housing 3m avg. PCE good/services price deflators (% y/y) as follows: hard landing, soft lading, or no landing? annualized r
Slide 14: Period Returns
Capital Markets Review April 2023 Period Returns 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 REITs Small cap REITs Lg. Cap Gr. Small cap Emg.Mkts Bonds Lg. Cap Val. Lg. Cap Gr. REITs Cmdty Highest return 19.7 41.3 28.0 5.5 26.6 37.5 0.0 31.9 31.4 41.2 25.9 Emg.Mkts Mid cap Lg. Cap Gr. REI
Slide 15: US Equity Indices
Capital Markets Review April 2023 U.S Equity Indices 3 YEAR 5 YEAR 3 YEAR 5 YEAR 3 MONTH 1 YEAR (ANN.) (ANN.) 3 MONTH 1 YEAR (ANN.) (ANN.) Period Ending 03/31/2023 RETURN RETURN RETURN RETURN Period Ending 03/31/2023 RETURN RETURN RETURN RETURN BROAD MARKET INDICES MID CAP INDICES DOW JONES INDU AVG
Slide 16: S&P Industry Groups
Capital Markets Review April 2023 S&P 500 Industry Groups 3 YEAR 5 YEAR 3 YEAR 5 YEAR 3 MONTH 1 YEAR (ANN.) (ANN.) 3 MONTH 1 YEAR (ANN.) (ANN.) Period Ending 03/31/2023 RETURN RETURN RETURN RETURN Period Ending 03/31/2023 RETURN RETURN RETURN RETURN S&P 500 ENERGY INDEX -4.7 13.2 48.1 9.4 S&P 500 AU
Slide 17: S&P Industry Groups
Capital Markets Review April 2023 S&P 500 Industry Groups 3 YEAR 5 YEAR 3 YEAR 5 YEAR 3 MONTH 1 YEAR (ANN.) (ANN.) 3 MONTH 1 YEAR (ANN.) (ANN.) Period Ending 03/31/2023 RETURN RETURN RETURN RETURN Period Ending 03/31/2023 RETURN RETURN RETURN RETURN S&P 500 TECH HW & EQP IX 23.5 -4.5 33.8 25.3 S&P 5
Slide 18: Global Equities
Capital Markets Review April 2023 Global Equities 3 YEAR 5 YEAR 3 YEAR 5 YEAR 3 MONTH 1 YEAR (ANN.) (ANN.) 3 MONTH 1 YEAR (ANN.) (ANN.) Period Ending 03/31/2023 RETURN RETURN RETURN RETURN Period Ending 03/31/2023 RETURN RETURN RETURN RETURN ALL COUNTRY WORLD INDICES FRONTIER MARKETS MSCI ACWI 7.4 -
Slide 19: Bonds, Commodities & Alt. Assets
Capital Markets Review April 2023 Bonds, Commodities & Alt. Assets 3 YEAR 5 YEAR 3 YEAR 5 YEAR 3 MONTH 1 YEAR (ANN.) (ANN.) 3 MONTH 1 YEAR (ANN.) (ANN.) Period Ending 03/31/2023 RETURN RETURN RETURN RETURN Period Ending 03/31/2023 RETURN RETURN RETURN RETURN BROAD MARKET REAL ESTATE BBgBarc US Agg B
Slide 20: Disclosures
Capital Markets Review April 2023 Disclosures Past performance is not a guide to future performance and the value of investments, and the income derived from those investments can go down as well as up. Future returns are not guaranteed, and a loss of principal may occur. References to market or com