EFTA Document EFTA01459058

20 November 2016 US Equity Insights 2016E S&P EPS cut from $128 to $125 mostly on stronger dollar and lower oil price assumptions We have long cautioned that every 10% appreciation in the dollar vs. mature currencies drags on S&P EPS growth by 2.5%. Every dime the Euro declines vs. L150 hits S&P EPS by $1. Every $5/bbl oil price decline hits S&P EPS by $1, net of small benefits outside of Energy, Industrial Capital Goods & Materials; which all suffer. Airlines, Consumer Staples & Discretionary firms benefit from lower oil prices, but most of the cost savings is passed forward to customers. We lower our average 2016 Euro assumption from about $1.10 to $1.05. We raise our 2016 avg. DXY assumption from about 95 to 100. We lower our 2016 avg. oil price assumption from $60/bbl to $55/bbl and natural gas to $2.75. We also tempered our growth assumptions at US Retailers, Housing and Banks. [Figure 1: (AY & EUR/USD 1015YlOps94.9 An I mlr itotay I %I mu w6:Mt6 /01.04:1164 )11141µ,2,4 • • „fr o, cot 4,"! 0,4 +t et 4, d e o " 4 , ce —II 0 A000 34: Sane LlooProorp Pin* LP Dame.* Bs* I,, I n I H LIS I 10 I Of I 06 Figure 3: W11 now expected to settle at --550 at 2016 end and stay under SBS even by 2018 end wn futons pekes overtime S/s S79 146 S40 SSS SSO 1 Sib 1 SOO Sn ,ti1S+ ,t 40. 4." ••••••.-0.< /OM /01, —Doc 1011 Snot destebeep AnanA LP, Dane?* Pint [figure 5: Weak oil prices- industry impact spectrum rsys sA SSO SSS SW Sb SSS • :Figure 2: Oil prices (1st month futures} J —W11 —Brent SS SS San* Neenttep; &won LP, Deane Be* S25 115 105 95 85 75 65 55 Figure 4: Brent now expected to settle at —$50 at 2016 end and stay under $60 even by 2018 end set , SfS Brent futures prices crew type 7,00 0; 401,0 gy p, 7015 --Oat 7016 . .0,t 2017 San* Woonteets /Him* LP DmeleNt EWA eel/ !Thrill COS GO1 Sarah Lti I :01 -'s Machin" 1.4elat a MAN :wed to Cnems 6a S Bette an coseeval EPS /astir/ fes> ce astrotos ce prose nthe to mane, acirce or heath area reiecot Scurce Deptichr Sr* SO S7S SA 5" SS* Sdis Sone, Teas ^.3-c as Cain :V. CO'S SWOPS NIS:0'S 75 ReSs‘aars Padaped Fox: Avireelirtang Page Deutsche Bank Securities Inc. CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0119271 SDNY_GM_00265455 EFTA01459058