EFTA01459058.pdf

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 :Figure 2: Oil prices (1st month futures} 1015YlOps94.9 S25 An I mlr itotay I %I 115 105 95 I,, 85 I n IH 75 LIS SS 65 I 10 J SS 55 I Of mu w6:Mt6 /01.04:1164 )11141µ,2,4 •• I 06 „fr o, cot 4,"! 0,4 et 4, de o " 4, ce +t —II 0 A000 34: —W11 —Brent Sane LlooProorp Pin* LP Dame.* Bs* San* Neenttep; &won LP, Deane Be* Figure 3: W11 now expected to settle at --550 at 2016 Figure 4: Brent now expected to settle at —$50 at 2016 end and stay under SBS even by 2018 end end and stay under $60 even by 2018 end S/s S79 wn futons pekes overtime rsys sA set , SfS Brent futures prices crew type SO S7S 146 SA S40 SSO SSS SSS SSO 1 SW 5" Sib 1 Sb SS* SOO Sdis Sn SSS ,ti1S+ ,t 40. 4." gy 7,00 p, 7015 --Oat 7016 . 0; 401,0 .0,t 2017 ••••••.-0.< /OM /01, —Doc 1011 Snot destebeep AnanA LP, Dane?* Pint San* Woonteets /Him* LP DmeleNt EWA [figure 5: Weak oil prices - industry impact spectrum Sone, eel/ !Thrill COS GO1 Sarah Lti I :01 -'s Teas ^.3- c as Cain :V. CO'S SWOPS NIS:0'S Machin" 1.4elat a MAN :wed to Cnems 6a S 75 ReSs‘aars Padaped Fox: Avireelirtang Bette an coseeval EPS /astir/ fes> ce astrotos ce prose nthe to mane, acirce or heath area reiecot Scurce Deptichr Sr* Page Deutsche Bank Securities Inc. CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0119271 CONFIDENTIAL SDNY_GM_00265455 EFTA01459058