硅谷银行-2024年第三季度经济报告（英）-29正式版-WN8

QuarterlyEconomic

Report3rdQuarter2024

SVBAssetManagementviewson

economicandmarketfactorsaffecting

globalmarketsandbusinesshealth

QCuliacrktetorlyedEictoMnaosmteicrtRitelepostrytlePublishedinQ32024|DataforQ22024

3Overview

4DomesticEconomy

10ForeignExchange

13CentralBanksandMonetaryPolicy

17CorporateBondMarket

21MarketsandPerformance

Overview

KeyTakeaways

TheFOMCmaintainsthefedfundsratefortheseventhconsecutivemeeting.

•TheFederalOpenMarketCommittee

(FOMC)continuedtoholdthefedfunds

ratesteadyatarangeof5.25%to

5.50%atitsJunemeeting.The

committeeupdateditsfed

fundsforecasttoone25-basis

point(bps)ratecutin2024.

AtitsJunemeeting,thecommitteereviseditsfedfundstargetexpectationsto5.1%from4.6%,implying

onlyoneratecutfor2024.

Thelabormarketshowsearlysignsofsoftening.

Theunemploymentrateincreasedfrom3.8%attheendofMarchto4.1%attheendofJune.These

statisticsarehigherthanayearearlier,whenthejoblessratewas3.6%.

Inflationhasbeenonthedecline.

•TheFOMCnoted“modest”progress

hasbeenmadetowardits2%inflation

objective.ChairmanJeromePowell

reinforcedthattheywouldliketosee

moredatatobeconfidentthata

declineininflationissustainable.

Corepersonalconsumptionexpenditures(PCE)—theFederalReserve’spreferredinflationindicator—

rose2.6%onayear-over-year(YoY)basis,whichisdownfrom4.2%inJune2023.

Loweryieldsareexpectedforcentralbanks.

Centralbanksexpectationspointtoloweryieldsinlate2024andinto2025,withtheexceptionofAsia

normalizinghigherovertime.

•WhilethelabormarketandGDPremain

solid,therehavebeenindicationsof

weakeningfromahistoricallystrong

position.

TheUSDslidesdownwardafterthefirsthalfof2024.

AstheFedprovidesclarityonitsmonetarypolicyandmarketspriceinratecutsin2024and2025,

narrowerinterestratedifferentialswillputpressureontheUSD.

•Consumersentimentreportsreflect

thatconsumersremaincautious,and

willcontinuetobeinfluencedby

inflationaswellastheuncertainty

aboutthestrengthofthelabormarket.

Fixedincomeyieldshavereboundedsincethebeginningof2024.

Thefirsthalfof2024sawshorter-durationgovernmentbondsbenefitfromtheFed’sactionofkeeping

interestrateshigher.Tightercreditspreadshavehelpedcorporatebonds,inparticular,highyield(HY),

whichoutperformed.

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Domestic

Economy

Unemployment:OntheRiseAmidstSlowingJobCreation

InQ22024,theaveragenumberofjobsgrewbyapproximately177,000permonth.Theunemploymentrateincreasedfrom3.8%attheendofMarchto

4.1%attheendofJune.AsmeasuredinMay,therecontinuetobemorejobsavailable(~8.1million)thanunemployedAmericans(~6.6million).The

numberofunemployedAmericansrosefurtherinJuneto~6.8million.

Non-FarmPayrollsUnemploymentRate

1,200

15.0

90012.5

10.0

600

300

7.5

5.0

4.1

0

2.5

-3000.0

JobOpeningsandLaborTurnover

8.0HireRateQuitRateJobOpeningsRateJobOpenings(RightAxis)

14,000

7.0

12,000

6.0

10,000

5.0

4.0

3.0

8,000

6,000

4,000

2.0

2,000

1.0

0.00

Source:USBureauofLaborStatistics,BloombergandSVBAssetManagement.Dataasof07/08/2024.

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Consumption:ContinuedFlatteningofConsumerSpending

RetailsalesexcludingvehicleshaveremainedrelativelyflatfromQ12024toQ22024,asconsumersslowdownontheirspendinginthe

currentrateandinflationenvironment.VehiclesalessawadownturninJune,dippingtoJanuarylevels.Thisisinkeepingwiththeoscillating

trendsseenin2023.

RetailSalesExcludingVehiclesVehicleSales

80025

23

700

21

600

19

500

17

40015

13

300

11

200

9

100

7

-

2003200420052006200720082009201020112012201320142015201620172018201920202021202220232024

5

Source:BloombergandSVBAssetManagement.Dataasof07/08/2024.

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Inflation:OntheDecline

CorePCE

CorePCEFEDAIT*AverageHourlyEarnings

Inflationhasslowlytrendeddownwardwiththe

June2024consumerpriceindex(CPI)dippingto

3.0%YoY.CorePCE—theFed’spreferredinflation

indicator—rose2.6%YoY,whichisdownfrom

4.2%inJune2023.

Inadditiontomarketforecasts,theFedcontinues

toreiteratethatitexpectsinflationtodeclineinto

2025.

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

3.9

2.6

2.0

CPIBreakdown(MoMChange)**

0.0

200720082009201020112012201320142015201620172018201920202021202220232024

AllitemsFoodFoodatHome

FoodAway

fromHome

Energy

Gasoline

(AllTypes)

Electricity

NaturalGas

(Piped)

AllItemsLess

FoodandEnergy

CommoditiesLess

FoodandEnergy

Apparel

NewVehicles

MedicalCare

Commodities

ServicesLess

Energy

Shelter

MedicalCare

Educationand

Communication

Jun-243.00%2.20%1.10%4.10%1.00%-2.50%4.40%3.70%3.30%-1.80%0.80%-0.90%3.10%5.10%5.20%3.30%0.70%

May-243.30%2.10%1.00%4.00%3.70%2.20%5.90%0.20%3.40%-1.70%0.80%-0.80%3.10%5.30%5.40%3.10%0.50%

Apr-243.40%2.20%1.10%4.10%2.60%1.20%5.10%-1.90%3.60%-1.30%1.30%-0.40%2.50%5.30%5.50%2.70%0.40%

Mar-243.50%2.20%1.20%4.20%2.10%1.30%5.00%-3.20%3.80%-0.70%0.40%-0.10%2.50%5.40%5.70%2.10%0.20%

Feb-243.20%2.20%1.00%4.50%-1.90%-3.90%3.60%-8.80%3.80%-0.30%0.00%0.40%2.90%5.20%5.70%1.10%0.40%

Jan-243.10%2.60%1.20%5.10%-4.60%-6.40%3.80%-17.80%3.90%-0.30%0.10%0.70%3.00%5.40%6.00%0.60%0.00%

Dec-233.40%2.70%1.30%5.20%-2.00%-1.90%3.30%-13.80%3.90%0.20%1.00%1.00%4.70%5.30%6.20%-0.50%-0.10%

Nov-233.10%2.90%1.70%5.30%-5.40%-8.90%3.40%-10.40%4.00%0.00%1.10%1.30%5.00%5.50%6.50%-0.90%-0.10%

Oct-233.20%3.30%2.10%5.40%-4.50%-5.30%2.40%-15.80%4.00%0.10%2.60%1.90%4.70%5.50%6.70%-2.00%0.90%

Sep-233.70%3.70%2.40%6.00%-0.50%3.00%2.60%-19.90%4.10%0.00%2.30%2.50%4.20%5.70%7.20%-2.60%1.00%

Aug-233.70%4.30%3.00%6.50%-3.60%-3.30%2.10%-16.50%4.30%0.20%3.10%2.90%4.50%5.90%7.30%-2.10%1.00%

Jul-233.20%4.90%3.60%7.10%-12.50%-19.90%3.00%-13.70%4.70%0.80%3.20%3.50%4.10%6.10%7.70%-1.50%1.20%

Source:Bloomberg,USBureauofLaborandStatisticsandSVBAssetManagement.Dataasof07/11/2024.*FEDAITisaverageinflationtargeting.

TheCPImeasurestheweightedaveragepricechangeinthepricespaidbyconsumersforhouseholdgoodsandservices.**Month-over-month.

QUARTERLYECONOMICREPORT|#0724-0105TD-0630257

Housing:SalesSlumpas

HousingMarket

PricesRise

9.0

8.0

Inspiteofexistinghomesupplyincreasing

duringQ22024,risingmedianhomeprices

havepusheddowntotalhomesales.

Meanwhile,mortgagerateshadsteadily

fallensincepeakinginApril,butappeartobe

bouncingbackupsincemid-June.Thisis

expectedtofurtherreducehome

affordabilityforbuyers.

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

TotalSales(NewandExisting)ExistingHomeSupply

14.0

12.0

10.0

8.0

6.0

4.0

2.0

0.0

HomePrices

MedianHomePriceFHFAPurchase*Case-Shiller20-City**

450.0

400.0

350.0

300.0

250.0

200.0

150.0

100.0

50.0

0.0

200420052006200720082009201020112012201320142015201620172018201920202021202220232024

Source:BloombergandSVBAssetManagement.Dataasof07/08/2024.*FederalHousingFinanceAgency.

**TheCase-Shiller20-Citymeasuresthepricesofresidentialrealestatein20majorUSmetropolitanareas.

QUARTERLYECONOMICREPORT|#0724-0105TD-0630258

BusinessOutlook:

Moderating

BusinessConfidenceIndex(BCI)

USBCIAverage

103

Businesssentimentcontinuedtohoverbelow

averageinQ22024,flatteningaftermonthsof

slowlyimproving.InstituteforSupply

Management(ISM)datahasindicatedthatUS

manufacturinghasbeencontractingthroughout

Q2,duetoweakdemandandsubsequently

decliningoutputinahighinflationenvironment.

102

101

100

99

98

97

96

95

20082009201020112012201320142015201620172018201920202021202220232024BusinessSentiment

Jun-24

May-24

Apr-24

Mar-24

Feb-24

Jan-24

Dec-23

Nov-23

Oct-23

Sep-23

Aug-23

Jul-23

Jun-23

May-23

Apr-23

Mar-23

Feb-23

Jan-23

Dec-22

Nov-22

Oct-22

DallasFedManufacturingSurvey

-15.1

-19.4

-14.5

-14.4

-11.3

-27.4

-10.4

-21.4

-20.6

-19.2

-18.5

-21.2

-24.4

-30.1

-24.1

-16.7

-14.5

-8.5

-20.9

-16.0

-20.8

PhillyFedManufacturingSurvey

1.3

4.5

15.5

3.2

5.2

-10.6

-12.8

-8.0

-12.1

-13.4

7.7

-14.2

-13.6

-10.0

-26.3

-22.4

-17.8

-9.8

-15.2

-17.0

-9.9

NewYorkFedEmpire

ManufacturingSurvey

-6.0

-15.6

-14.3

-20.9

-2.4

-43.7

-14.5

9.1

-4.6

1.9

-19.0

1.1

6.6

-31.8

10.8

-24.6

-5.8

-32.9

-11.2

4.5

-9.1

KansasCityFed

ManufacturingSurvey

-8.0

-2.0

-8.0

-7.0

-4.0

-9.0

-1.0

-2.0

-6.0

-7.0

0.0

-9.0

-11.0

-2.0

-9.0

-1.0

-2.0

-2.0

-5.0

-2.0

-1.0

RichmondFed

ManufacturingSurvey

-10.0

0.0

-7.0

-11.0

-5.0

-15.0

-11.0

-5.0

3.0

5.0

-7.0

-9.0

-8.0

-10.0

-12.0

-8.0

-14.0

-7.0

-4.0

-7.0

-9.0

ISMManufacturing

PMISA

48.5

48.7

49.2

50.3

47.8

49.1

47.1

46.6

46.9

48.6

47.6

46.5

46.4

46.6

47.0

46.5

47.7

47.4

48.1

48.9

50.0

ISMNon-Manufacturing

48.8

53.8

49.4

51.4

52.6

53.4

50.5

52.5

51.9

53.4

54.1

52.8

53.6

51.0

52.3

51.2

55.0

54.7

49.0

55.2

54.7

Source:Bloomberg,OrganizationforEconomicCo-operationandDevelopment(OECD,2022)andBCI(indicator).Updated07/08/2024.Heatmapcolors

arebasedontheindicesandtimeperiodsshownandsummarizebusinessplansforeconomicactivities.FortheFedsurveys,thenumberrepresents

businesssentiment,withthehighernumberrepresentinghigherbusinesssentiment.ForISMindices,theneutralnumberisusually50.>50,the

economyislikelytoexpand;<50,theeconomyislikelytocontract.

QUARTERLYECONOMICREPORT|#0724-0105TD-0630259

ForeignExchange

USDResumesItsDownwardSlideastheFedProvidesClarityon

MonetaryPolicy

Afterastronghalfoftheyear,theUSDreverses.TheUSDhascloselytrackedFedratecutexpectations.

H12024H22024

No.ofFedcutsprojectedforJan2025(leftaxis)DXYUSDindex(rightaxis)

TaiwaneseDollar

IndianRupee

SouthKoreanWon

ChineseRenminbi

CanadianDollar

NewZealandDollar

SwissFranc

SwedishKrona

SingaporeDollar

AustralianDollar

Euro

JapaneseYen

BritishPound

BrazilianReal

MexicanPeso

IsraeliShekel

ColombianPeso

%

-15.0-10.0-5.00.05.010.0

-12.3

-13.2

-5.3

-6.4

-2.3

-3.2

-3.6

-6.4

-4.9

-2.6

-2.1

-3.0

-7.4

-4.2

-7.2

-0.2

-0.7

-0.4

-0.2

0.1

0.2

0.3

0.4

0.5

0.8

1.1

1.7

1.8

1.9

2.7

3.0

4.0

4.9

5.9

0108

-1

-2

-3

-4

-5

-6

-7

-8

Jun-23Aug-23Oct-23Dec-23Feb-24Apr-24Jun-24

96

106

104

102

100

98

Currencyperformancevs.theUSD(percent)through07/12/2024.ProjectedUSratecutsdeterminedfromfedfundfuturesmarketpricing.

Source:Bloomberg.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302511

NarrowerInterestRateDifferentialsWillWeighontheUSD

Withmarketspricingintwofullratecutsin2024anduptofourmorein2025,theUSinterestrateadvantageisprojectedtonarrowor

disappearaltogether,puttingdownwardpressureontheUSD.

CurrentProjected2024Year-End

CountryPolicyRate

USPolicyRate

Advantage

PolicyRate

USPolicyRate

Advantage

UnitedStates5.50%--4.47%--

Australia4.35%1.15%4.38%0.09%

Canada4.75%0.75%4.10%0.37%

Eurozone3.75%1.75%3.20%1.27%

Japan0.10%5.40%0.29%4.18%

NewZealand5.50%0.00%4.60%-0.13%

Switzerland1.25%4.25%0.95%3.52%

UK5.25%0.25%4.69%-0.22%

ProjectedpolicyratesaccordingtofuturesmarketsforUSandAustralia,andovernightindexedswap(OIS)marketsforallothercurrencies.

Source:Bloomberg.Dataasof07/12/2024.QUARTERLYECONOMICREP1O2RT|#0724-0105TD-063025

12

CentralBanksand

MonetaryPolicy

Short-EndInterestRates

Ratecuttiminghasbeendelayeduntillate2024aspersistentinflationforcestheFedtokeeprateshigherforlonger.

1-YearUSTYield2-YearUSTYieldFedFundsMidpoint

5.50

5.25

5.00

5.38

5.12

4.75

4.50

4.71

Q42022:TheFedreducedthepaceofrate

hikesfrom75bpsto50bpsinDecember,as

inflationshowedsignsofabatingandthe

marketexpectedafairlystablefedfundsrate

in2023.

Q22023:TheFeddelivereditsfirstpausein

ratehikesforthecycle.Inflationmaterially

improved,andtheFedcitedthe“lageffect”of

theratehikes’impactontheeconomy.

4.25

4.00

3.75

3.50

3.25

Q32023:TheFedpausedagaininSeptember

aseconomicprojectionsimprovedfor2023

and2024.TheFedstatedthatitexpectedone

morehikein2023,butmarketoddsreflected

thatitmaybedone.

3.00

2.75

2.50

2.25

2.00

Q42023:Anyexpectationsforfurtherrate

hikeswereeliminatedastheFedpointedto

acceleratingdisinflation.Ratecuttimingwas

pulledforward,withtheFedpotentially

deliveringthefirstcutduringthefirsthalfof

2024.

1.75

1.50

1.25

1.00

0.75

Q12024:Persistent,higher-than-expected

inflationpushedthetimingofFedratecuts

intomid-2024asmarketpricingreducedrate

cutsfromsixtolessthanthreefortheyear.

ThedotplotreiteratedtheFedstancefor

threecutsin2024.

0.50

0.25

0.00

Q22024:Elevatedgrowthandstubborn

inflationforcedtheFedtoreviseratecut

timingtolate2024anddropthecutcountto1

forthisyear.Theholdingpatternpersists,but

thequantityofeasingexpectedthrough2026

remainsunchanged.

Source:Bloomberg,USTreasuryYieldandSVBAssetManagement.Dataasof06/30/24.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302514

EconomicForecasts

EconomicProjections202420252026

UnitedStates

ChangeinRealGDP2.3%1.8%2.0%

CorePCE2.8%2.2%2.1%

UnemploymentRate4.0%4.1%4.0%

UnitedKingdom

ChangeinRealGDP0.7%1.2%1.5%

CPI2.6%2.2%2.0%

UnemploymentRate4.4%4.5%4.7%

Eurozone

ChangeinRealGDP0.7%1.4%1.3%

CPI2.4%2.1%2.0%

UnemploymentRate6.5%6.5%6.5%

Japan

ChangeinRealGDP0.4%1.1%0.9%

CPI2.4%1.8%1.7%

UnemploymentRate2.5%2.4%2.3%

China

ChangeinRealGDP5.0%4.5%4.2%

CPI0.6%1.5%1.9%

UnemploymentRate5.1%5.1%5.0%

Source:Bloomberg.Dataasof06/30/2024.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302515

GlobalCentralBankExpectations

Centralbankexpectationspointtoloweryieldsinlate2024andinto2025,withAsianormalizinghigherovertime.

GlobalCentralBankRateExpectations

USDEURGBPJPYCNY

6.25

5.25

4.25

3.25

2.25

1.25

0.25

-0.75

Jun-24Sep-24Dec-24Mar-25Jun-25Sep-25Dec-25Mar-26Jun-26

Source:Bloomberg.Dataasof06/30/24.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302516

CorporateBond

Market

Corporates:NewIssueUpdate

Newissuanceofinvestmentgrade(IG)corporatebondssawastrongstartin2024.Whileprimaryissuancehasmoderatedoverthepastfewmonths,itcontinuesgrowingata

healthyclip.Severalfactorshavebeendrivingtherobustissuancesofarthisyear.Earningshavebeenrelativelystrongonthewhole,andtherehasbeennorecession,despite

interestratesthathaveremainedhigherforlonger.Whilefinancialsrepresentapproximately~40%ofIGbondissuance,non-financialsectorissuancehasbeengaining

momentumaswell,thanksinparttosignificantM&Aactivityinthehealthcaresector,whichhasbeendrivingnewissuance.Expectationsarerisingforadditionaldealsin

2024,whichcouldpushoverallnewissuanceforecastsevenhigher,particularlywhencombinedwiththeneedtorefinancependingdebtmaturities.

USIGCorporateNew-IssueVolume

IndustrialsFinancialsUtilities

1,661

1,500

1,311

1,000

500

372

508492

658659630

856810857

1,0631,0841,137

921993

1,1541,139

815

0

200620072008200920102011201220132014201520162017201820192020202120222023YTD2024

IGCorporateNew-IssueSupply(Sector/Maturity)IGCorporateNew-IssueSupply(Rating/Maturity)

IndustrialsFinancialUtilities

AAAAAABBB

1-5yr

6-12yr

13yr+

$122.6

$366.9

$325.5

1-5yr

6-12yr

13yr+

6%

1%5%

17%

6%

15%

41%

47%

38%30%

47%

47%

1-5yr

6-12yr

13yr+

$159.4

$423.2

$556.7

1-5yr

6-12yr

13yr+

16%

7%7%

2%6%

16%38%

42%

54%

30%

44%

39%

1-5yr

6-12yr

13yr+

$195.0

$398.0

$559.9

1-5yr

6-12yr

13yr+

14%

8%

8%

13%

15%

11%

47%26%

10%66%

36%45%

$Billions0%10%20%30%40%50%60%70%80%90%100%

050100150200250300350400450500550600

Source:BloombergFixedIncomeIndicesandBarclaysResearch.Dataasof06/30/2024.Pastperformanceisnotaguaranteeoffutureresults.

Totalsmaynotaddupto100%duetorounding.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302518

CreditMetricsRemain

Stable,DespiteHigherfor

8.0

S&P500LeverageandDebtCoverage

Debt/EBITDA*(LHS)FCF**/Debt

18.0%

LongerInterestRates

7.0

6.0

16.0%

14.0%

Industrialcorporatecreditmetricsremainhealthy,despite

theongoingimpactofhigherinterestrates.Leverage

continuestoremainathistoricallylowlevels,whiledebt

coveragehasstabilizedaftermilddeteriorationduring

2022and2023.

5.0

4.0

3.0

2.0

1.0

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

Shareholderspendingremainsmodestoveralland

generallywellbelowfreecash-flowlevels.Whiledividends

continuetorisemodestly,shareholderrepurchaseshave

beensignificantlycurtailed,helpingcorporateissuers

maintaintheirstrongcreditprofiles.

0.00.0%

Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22Jun-23Jun-24

S&P500CapitalSpendingandDistribution

DividendCapExBuyback

120

Increasedcapitalspendinghasbeguntolevelofffrom

recentpeaks,givenelevatedborrowingcostsandongoing

economicuncertainty.Capitalexpendituresandlong-

terminvestmentsareexpectedtocontinuemoderating

throughout2024,whichwillfurtherbolstercorporate

creditmetrics.

100

80

60

40

20

0

Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22Jun-23Jun-24

Source:Bloomberg.Dataasof06/30/2024.*Earningsbeforeinterest,taxes,depreciation,andamortization.**Freecashflow.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302519

Corporates:SpreadandSectorPerformance

TheriskpremiumbetweenUSTreasuriesandUScorporatebondsremainsatsomeofthetightestlevelsinovertwoyears.Investordemandremainsstronggiventhepositiveimpactof

higheryields,whichhasbeendrivingspreadsincreasinglytighter,despiterelativelyheavynewsupplyduringthefirsthalfof2024.

USIGCorporateBondIndices—SpreadstoUSTreasury

1-10yUSCorporate1-10yUSFinancial1-10yUSIndustrial

200

180

160

140

120

100

80

60

Operatingprofitability,asmeasuredbyEBITDAmargin,sawsignificantgrowthYoYinthetechnologyandtelecom/mediasectorsastheAIrevolutioncontinuestodriveincreased

profitability.Utilitiesalsosawanincreaseinoperatingprofitabilitydueinparttorecordhighlevelsofrateincreasesduring2023,whichcontinuetoflowthroughmargins.Marginsacross

theenergysectorfellYoYduetolowerprofitabilitywhencomparedtothesector’srecordoverallyearin2022andearly2023.

S&P500EBITDAMargin(%)

June2023June2024

28.2

30

17.6

20

23.1

21.521.1

18.418.4

10

12.812.911.810.8

11.511.6

8.99.2

8.1

6.9

5.7

0

EnergyMaterialsIndustrialsConsumer

Discretionary

ConsumerStaplesHealthcareInformation

Technology

TelecomServicesUtilities

Source:BloombergandICEBofAIndices,S&P500Indices.Dataasof06/30/2024.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302520

Marketsand

Performance

MarketSectorPerformance

Despiteconcernsabouthigherinterestrates,equitymarketsperformedimpressivelyinthefirsthalfof2024.Thiswasledbyarallyintechnologystocks,

especiallythosebenefittingfromtheartificialintelligence(AI)boom.Somevolatilityininterestratesledtomodestnegativereturnsinlonger-termbonds.

20142015201620172018201920202021202220232024YTD

Biotech

43.24%

Biotech

13.09%

CrudeOil

45.03%

Biotech

43.85%

USTreasury

0.86%

Tech

45.97%

IPOIndex

109.60%

CrudeOil

55.01%

CrudeOil

6.71%

Tech

52.75%

Tech

26.50%

Tech

14.23%

Tech

3.23%

HighYield

17.13%

Tech

39.65%

USAggregate

0.01%

CrudeOil

34.46%

Biotech

48.10%

Tech

28.73%

HighYield

-11.19%

IPOIndex

50.90%

S&P500

15.29%

S&P500

13.69%

S&P500

1.38%

Tech

12.27%

IPOIndex

35.75%

HighYield

-2.08%

IPOIndex

33.87%

Tech

42.64%

S&P500

28.71%

USTreasury

-12.46%

S&P500

26.29%

CrudeOil

13.80%

USIGCorporate

7.46%

USTreasury

0.84%

S&P500

11.96%

S&P500

21.83%

USIGCorporate

-2.51%

Biotech

32.34%

S&P500

18.40%

HighYield

5.28%

USAggregate

-13.01%

HighYield

13.45%

IPOIndex

7.06%

IPOIndex

7.17%

USAggregate

0.55%

USIGCorporate

6.11%

CrudeOil

12.47%

S&P500

-4.38%

S&P500

31.49%

USIGCorporate

9.89%

USIGCorporate

-1.04%

USIGCorporate

-15.76%

USIGCorporate

8.52%

Biotech

3.95%

USAggregate

5.97%

USIGCorporate

-0.68%

USAggregate

2.65%

HighYield

7.50%

Tech

-6.02%

USIGCorporate

14.54%

USTreasury

8.00%

USAggregate

-1.54%

S&P500

-18.11%

Biotech

7.76%

HighYield

2.58%

USTreasury

5.05%

HighYield

-4.47%

USTreasury

1.04%

USIGCorporate

6.42%

Biotech

-14.99%

HighYield

14.32%

USAggregate

7.51%

USTreasury

-2.32%

Biotech

-25.62%

USAggregate

5.53%

USIGCorporate

-0.49%

HighYield

2.45%

IPOIndex

-7.98%

IPOIndex

-0.51%

USAggregate

3.54%

IPOIndex

-17.53%

USAggregate

8.72%

HighYield

7.11%

IPOIndex

-9.89%

Tech

-30.29%

USTreasury

4.05%

USAggregate

-0.71%

CrudeOil

-45.87%

CrudeOil

-30.47%

Biotech

-15.61%

USTreasury

2.31%

CrudeOil

-24.84%

USTreasury

6.86%

CrudeOil

-20.54%

Biotech

-20.38%

IPOIndex

-57.06%

CrudeOil

-10.73%

USTreasury

-0.86%

Allreturnsaboveareonatotalreturnbasis.2024returnsareonanaggregatebasisthrough06/30/2024.USAggregatereferstoBloombergBarclaysAggregateBondIndex.USTreasuryreferstotheUSTreasuryallocationofthe

BloombergBarclaysAggregateBondIndex.USIGCorporatereferstotheIGCorporateallocationoftheBloombergBarclaysAggregateBondIndex.HighYieldreferstotheUSCorporateHighYieldBloombergIndex.CrudeOilrefers

totheSpotWestTexasIntermediateCrudeOil—Bloomberg-sourced.S&P500referstotheS&P500TotalReturnIndex.TechreferstotheS&PGlobal1200InformationTechnologyIndex.BiotechreferstotheS&PBiotechnology

SelectIndustryIndex.IPOIndexreferstotheRenaissanceIPOIndex.

Source:BloombergandBloombergBarclaysIndicesasof06/30/2024.Pastindexperformanceisnoguaranteeoffutureresults.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302522

BondMarket

2024YTDBondPerformance

Performance

ICEBofA0-3MonthUSTreasuryBillIndex

ICEBofAUSHighYieldIndex

2.7%

2.6%

TheFed’sactionofkeepinginterestrateshigher

hascontributedtotheoutperformanceofshort-

termUSTreasurybillsinthefirsthalfof2024.

Meanwhile,tightercreditspreadshavehelpedthe

corporatebondmarkets.Inparticular,highyield

(HY)hasoutperformedbothlonger-term

governmentandIGbondsandhasenjoyed

consecutivequartersofpositivereturns.

ICEBofA1-3YearUSTreasuryIndex

ICEBofAUSInflation-LinkedTreasuryIndex

ICEBofAUSCorporateIndex

ICEUSBroadMunicipalIndex

ICEBofAUSBroadMarketIndex

ICEBofAGlobalBroadMarketIndex

-0.1%

-0.5%

-0.9%

0.0%

1.2%

0.9%

-2.0%0.0%2.0%4.0%

BondYields

FederalFundsTargetRate-UpperBound10-YearUSTreasury2-YearUSTreasury

6.0%

5.5%

5.0%

4.0%

4.8%

4.4%

3.0%

2.0%

1.0%

0.0%

Sources:BloombergandICEBofAIndices.Asof06/30/2024.Indicesareunmanagedandcannotbeinvestedindirectly.Pastperformanceisnot

aguaranteeoffutureresults.QUARTERLYECONOMICREPORT|#0724-0105TD-063025

23

Globaland

YieldsAcrosstheGlobe

DomesticYields

AverageCurrent

6.0

Fixedincomeyieldshavereboundedafterachallengingstarttothe

year,andhavestabilizedwithintheirrespectiveranges.Investors

haveembracedtheFed’sassertivemonetarypolicystance,leading

toenhancedfixedincomeyields.AnticipationofratecutsbytheFed

hasledinvestorstocapitalizeonextendedperiodsofhigheryieldsin

fixedincometosecureattractiveincome.

5.0

4.0

3.0

2.0

1.0

0.0

USGermanyUKItalySpainJapanFranceCanada

BroadFixedIncomeYieldsShort-DurationYields

AverageCurrentAverageCurrent

8.0

10.0

8.0

6.0

6.0

4.0

4.0

2.0

2.0

0.0

0.0

USTreasuries*USAgenciesCorporatesUSMBSUSABSUSCMBS

1-3YearUS

Treasuries

1-3YearUS

Agencies

1-3Year

Corporates

<1Year

Corporates

AAAAssetBacked

*USTreasuriespertaintoon-the-runsovereign10-yearsecurities.

Dailyyieldsfrom06/30/2023to06/30/2024.Sources:BloombergandICEBofAIndices.Indicesareunmanagedandcannotbeinvestedindirectly.

Pastperformanceisnotaguaranteeoffutureresults.

QUARTERLYECONOMICREPORT|#0724-0105TD-06302524

QuarterlyCreditandDurationPerformanceStratification

TheFed’sdecisiontomaintainhigherratesinthefirsthalfof2024,coupledwithexpectationsofratecutslaterintheyear,ledtothe

outperformanceofshort-durationfixedincomeacrosstheentirecreditspectrum.

CorporateCredit

Duration0-0.250.25-0.50.5-1.01.0-1.51.5-2.02.0-2.52.5-3.03.0-4.04.0-5.05.0-6.06.0-7.07.0-8.08.0-9.09.0-10.010.0-11.011.0-12.0Over12.0

AAA1.41%1.34%1.13%1.09%0.99%0.88%0.66%0.77%1.01%0.53%0.96%0.08%-0.89%-0.92%-1.00%-0.71%-2.73%

AA11.31%1.22%1.26%0.90%0.69%0.79%0.60%0.69%0.46%0.09%-0.01%-0.61%-2.36%0.82%-0.64%-2.45%

AA21.41%1.36%1.26%1.14%1.07%0.98%0.87%0.70%0.45%0.52%0.42%0.18%-0.14%-0.47%0.05%-0.34%-1.89%

AA31.41%1.37%1.20%1.10%0.97%1.00%0.77%0.62%0.67%0.29%0.15%-0.15%-0.37%-0.79%-1.54%-1.69%-2.51%

A11.41%1.41%1.27%1.16%1.07%1.04%0.98%0.87%0.72%0.70%0.45%0.28%0.80%-0.01%-0.41%-0.55%-2.09%

A21.45%1.42%1.29%1.19%1.04%0.98%0.96%0.83%0.66%0.59%0.33%0.13%0.15%-0.50%-0.83%-1.05%-2.29%

A3

BBB1

BBB2

1.50%

1.44%

1.46%

1.42%

1.48%

1.46%

1.33%

1.35%

1.34%

1.23%

1.26%

1.31%

1.05%

1.08%

1.10%

1.02%

1.11%

1.11%

1.00%

1.02%

0.99%

0.80%

0.84%

0.92%

0.74%

0.72%

0.85%

0.76%

0.72%

0.78%

0.42%

0.35%

0.44%

0.09%

0.18%

0.33%

-0.13%

0.04%

0.22%

-0.19%

0.00%

0.02%

-0.94%

-0.34%

-0.58%

-1.32%

-1.03%

-0.62%

-2.19%

-1.85%

-1.74%

BBB31.48%1.52%1.33%1.44%1.34%1.33%1.29%1.18%0.96%1.08%0.74%0.45%1.00%0.26%-0.21%-0.34%-0.98%

USTreasuries

Duration0-0.250.25-0.50.5-1.01.0-1.51.5-2.02.0-2.52.5-3.03.0-4.04.0-5.05.0-6.06.0-7.07.0-8.08.0-9.09.0-10.010.0-11.011.0-12.0Over12.0

Treasury1.32%1.30%1.20%1.06%0.95%0.87%0.79%0.67%0.54%0.40%0.13%-0.06%-0.42%-1.10%-0.89%