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Anthony Chan Winter Economic OutlookVideo

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Transcript Browser Title: Video transcript: Anthony Chan Winter Economic Outlook

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Transcript: <p><b>Economic Outlook | Winter 2016</b></p> <p><b>Description:</b> String music begins to play.</p> <p><b>On Screen:</b> J.P. Morgan logo. Disclosure: <b>INVESTMENT PRODUCTS ARE: NOT FDIC INSURED, NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES, SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.</b></p> <p><b>On Screen:</b> Economic Outlook | Winter 2016 | Donald Trump’s Moment of Truth</p> <p><b>Description:</b> The scene begins with close-up of Anthony Chan, who begins to speak.</p> <p><b>On Screen: </b>ANTHONY CHAN, PhD, CHIEF ECONOMIST, CHASE</p> <p><b>Anthony Chan:</b> Hello and welcome to our Winter Economic Outlook. I’m Doctor Anthony Chan, Chief Economist for Chase. Today, I’m going to step back and review the state of the global economy after a long and hard fought campaign. And, we’re going to take a look at what we can expect from the incoming administration of President<br> Donald Trump.</p> <p><b>Divider Slide:</b> The Trump Agenda</p> <p><b>Anthony Chan: </b>The bottom line from a Trump victory is that we’re going to see lots of stimulus to the overall economy. The tax agenda was to lower tax rates virtually for all tax brackets. That should end up stimulating the overall economy. And that should also offset some of the negative uncertainty that investors were concerned<br> about. The bottom line is – the US economic expansion should continue under a Trump administration.</p> <p><b>Divider Slide:</b> Economic Policy</p> <p><b>Anthony Chan:</b> So what would be the impact of President Trump’s economic policies? We know that the higher deficit expenditures, while some people may like them or not, end up stimulating the overall economy. These higher deficits are expected to stimulate the overall economy in the United States anywhere from 1/4 percentage point. (Call out: 0.25% - 0.5% added growth) to as much as 1/2 percentage point in incremental growth to GDP in the United States</p> <p><b>Divider Slide: </b>Accelerating Growth</p> <p><b>Anthony Chan:</b> Overall, the US economy is showing signs of life. For the year as a whole because what happened in the first 6 months, the economy will grow no more than 1.6%, but the positive forward momentum that we have seen so far suggests that in 2017, the economy has a good chance of growing as much as 2%. We know that on the job<br> front, we continue to create jobs, the unemployment rate continues to remain low, and in short, the U.S. economy looks pretty healthy from here. (Call out: 1.6%). In Europe, despite the negative impact of Brexit, the economy continues to remain resilient. (Call out: U.S.: 1.6% Europe: 1.4%) The euro zone should continue to grow at 1.4% in 2016 (call out: U.S.: 1.6% Europe: 1.4% Japan: 0.6%) and Japan should continue to grow at around 0.6% in 2016.</p> <p><b>Anthony Chan:</b> In fact, in 2016, we’re seeing that we are experiencing (call out: 3 million new workers)<br> an increase of as much as 3 million new workers rejoining the labor force.</p> <p><b>Chart: </b>U.S. Labor Force, 9/09 – 9/16</p> <p><b>Anthony Chan:</b> That is running at a pace that is almost 6 times faster than the average we’ve seen since 2009. So we are seeing quality improvements in the labor market and we are seeing nice increases in wages. We are seeing that average hourly earnings now are rising as much as 2.6% on a year-to-year basis. This improvement in labor market conditions should continue to fuel consumer spending well into 2017.</p> <p><b>Divider Slide:</b> Rising Interest Rates</p> <p><b>Anthony Chan: </b>The Federal Reserve is expected to continue to raise interest rates in 2016, raising rates at the end of the year, because they have been telling us they were going to do it all year long. For 2017, we expect 1 or 2 rate hikes (call out: 1-2 rate hikes), which by the way are reflective of the improvement in labor market conditions but are not so great as to cause an increase in the odds of a recession in 2017.</p> <p><b>Divider Slide: </b>U.S. Equities</p> <p><b>Anthony Chan: </b>What can we expect for the US equity market in 2017? We believe that equity markets, will in fact have a much better performance in 2017 compared to 2016. But as to whether a correction can come? Corrections can come at any point and time.</p> <p><b>Divider Slide:</b> Looking Ahead</p> <p><b>Anthony Chan:</b> The question is what should investors look for. Investors were concerned about increase uncertainty under the current administration. And I think that the increase fears of such uncertainty will prove to be overblown. We know that there are checks and balances in our overall political structure. We know that fiscal stimulus will be a positive for the economy. And we know that there are some sectors that were our favorite under our republican administration. And those include the energy, the defense, manufacturing, pharmaceuticals and the financial sector (call out: Energy, Defense, Manufacturing, Pharmaceuticals, Financials)</p> <p><b>Anthony Chan: </b>So, the bottom line is that although it may be a choppy ride in 2017, the resiliency of the US<br> economic expansion should continue well into 2017.</p> <p><b>On Screen:</b> Learn how these trends may impact your portfolio.</p> <p><b>On Screen: </b>Talk to our Advisors</p> <p><b>On Screen:</b> JPMorgan</p> <p><b>On Screen:</b> This video and its content have been developed for J.P. Morgan Securities LLC clients and prospects, is for informational and educational purposes only, and is designed to provide general market commentary and information relating to certain services offered by J.P. Morgan Securities LLC, an affiliate of JPMorgan Chase &amp; Co. Opinions expressed herein are those of Anthony Chan and may differ from those of other J.P. Morgan employees and affiliates. The information in no way constitutes J.P. Morgan research and should not be trusted as such. Further, the views expressed herein may differ from that contained in J.P. Morgan research reports.</p> <p>The information and views expressed are not intended to provide specific advice or recommendations for any individual. You should carefully consider your needs and objectives before making any decisions. For specific guidance on how this information should be applied to your situation, you should consult your Advisor. <b>Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.</b> Investments in international or emerging markets can be more volatile and involve a greater degree of risk.</p> <p>Investment products and services are offered through <b>J.P. Morgan Securities LLC </b>(JPMS), a member of FINRA and SIPC.&nbsp; JPMS is an affiliate of JPMorgan Chase Bank, N.A.&nbsp;&nbsp; Products not available in all states.</p> <p>®2017 JPMorgan Chase &amp; Co.</p> <p>&nbsp;<br> </p>

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