Welcome to the

15

th

Annual

Economic Forecast Breakfast Equal Housing Opportunity

Member FDIC

Bob Ramsey •  Sports Announcer •  Radio Celebrity •  Saint Louis University Hall of Famer

Thank you to our Sponsors

Predictions for 2015

Predictions for 2015 Gas Prices (at the pump and per barrel) •  Predicted: $2.65 & $71.18 •  Actual:

$2.16 & $43.88

Predictions for 2015

Prime Rate •  Predicted: 3.51% •  Actual:

3.25%

Predictions for 2015

Unemployment Rate •  Predicted: 5.80% •  Actual:

4.60%

Predictions for 2015 Dow Jones Industrial Average •  Predicted: 16,620.00 •  Actual:

17,824.02

Predictions for 2015

NASDAQ •  Predicted: 4,477.27 •  Actual:

5,075.20

Predictions for 2015

S&P •  Predicted: 2,100.68 •  Actual:

2,083.53

Predictions for 2015

Price of Gold •  Predicted: $1,262.91 •  Actual:

$1,073.50

Predictions for 2015 Treasury Yields •  Predicted: 2 Year – 1.11% 10 Year – 2.80% •  Actual:

2 Year – 0.90% 10 Year – 2.27%

Predictions for 2016

Please take a moment to fill out your predictions for 2016 on the sheet provided in your folder. Please leave them on the table before you leave.

Speakers

Bob Hardcastle President & CEO of Delta Investment Services, Host of the AM radio show, “Money Talk,” for nearly 3 decades and has over 40 years of financial planning experience

Presented by Bob Hardcastle

Image courtesy of: https://jeenalthakkar.wordpress.com/

Past performance is not a guarantee of future results. This presentation contains opinions and analysis that are provided by the author for informational purposes only and should not be used as the primary basis for an investment decision.

Securities & investment advisory services offered through VSR Financial Services, Inc., a Registered Investment Adviser member FINRA and SIPC Delta Investments is not owned or controlled by VSR Financial Services, Inc.

When When thethe view view is NOT is clear clear .....

Solid ground-things get shaky Road get slippery Clear to foggy

The high for the Dow this year was approximately

18,400 •  September was the worst quarter in over 4 years •  Coming into the 1st of November, the Dow was still off about 0.97 for the year; then, coming into December, -0.57% •  The Nasdaq YTD was +7.87% and the S&P, +1.05% Source: Yahoo Finance

• Led the way • Health • Biotech • International markets

•  There will probably be an increase in the discount rate this month

If it’s raised, don’t jump out a window; if so make sure it’s on the 1st floor

with maybe a slight increase, we could see a slight knee jerk reaction . . .

Is she looking to the stars?????

It’s my opinion that an increase will not hurt the market, but in fact help the market move higher quicker

•  We could see a 4-6% in the Dow and the S&P in 2016. •  The Nasdaq has been higher all year, more volatile, but higher; and possibly higher next year, than the Dow and the S&P.

Baffling that it’s going down . . . In my opinion, it’s telling us, there’s no inflation, but there could be deflation

As of yesterday •  Gold @ $1,064.90 •  Silver @ $14.08 •  Platinum @ $829.00

Source: kitco.com

Stay away from debt with most companies, especially oil companies

$107

Currently $41.58 range Low of $37 (intraday)

. . . And gas is almost gone $1.20 BPU Source: Investing.com

Buy low, sell high •  Metals market •  Municipal bonds •  Crude •  Biotech •  Healthcare •  Large caps

•  Balance your portfolio for growth and income when you need it. •  Looking at good investments that have tax benefits will be more and more important to find as the next years go by. •  Risk is always just around the corner when the markets go down.

THANK YOU

Stephen Freedman Key Analyst and Strategist at UBS. Earned Ph.D. in financial economics and a Masters Degree in economics and business administration from the University of St. Gallen in Switzerland.

Economic Outlook Dr. Stephen R. Freedman, CFA CIO Wealth Management Research 1 December 2015

This report has been prepared by UBS Financial Services Inc. (UBS FS) and UBS AG. Please see important disclaimers and disclosures beginning at the end of this document.

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Dr. William Emmons Assistant VP and Economist for the Federal Reserve Bank of Saint Louis

Royal Banks of Missouri 15th Annual Economic Forecast Breakfast

The Economic Outlook for 2016 December 1, 2015 William R. Emmons Federal Reserve Bank of St. Louis [email protected] These comments do not necessarily represent the views of the Federal Reserve Bank of St. Louis or the Federal Reserve System. 51

The Economic Outlook for 2016

§  The U.S. economy

§  The St. Louis economy

§  Federal Reserve policy 52

The U.S. Economy: Moderate Growth

FOMC-Speak § “The FOMC expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace.” q FOMC statement, Oct. 28, 2015

Translation § We expect GDP growth of: Ø  2.1% in 2015 Ø  2.3% in 2016 Ø  2.2% in 2017

§ We will adjust monetary policy to support moderate growth while keeping inflation in check.

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The U.S. Economy: Near Full Employment

FOMC-Speak § “Labor market indicators continue to move toward levels the Committee judges consistent with its dual mandate.” q FOMC statement, Oct. 28, 2015

Translation §  The unemployment rate, currently 5.0%, can fall safely to about 4.8%. §  We do not expect monthly employment growth of 200,000+ much longer. §  Labor-force growth is under 100,000 and falling.

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The U.S. Economy: Low Inflation

FOMC-Speak § “The Committee expects inflation to rise gradually toward 2 percent over the medium term.” q FOMC statement, Oct. 28, 2015

Translation § We expect inflation of: Ø  0.4% in 2015 Ø  1.7% in 2016 Ø  1.9% in 2017

§ Don’t worry that we’ll undershoot our inflation target 6 years in a row (2012-17) and 9 years out of 10 (2008-2017) . 55

The St. Louis Economy: Tracking the Nation

Percent

St. Louis MSA: 5.1% USA: 5.2%

Periods of recession indicated by gray shading.

56 Quarterly through Q3.2015

The St. Louis Economy: Trailing the Nation

Index levels equal l00 in 2000

USA: +7.7% since 2000

St. Louis MSA: +0.1% since 2000 Periods of recession indicated by gray shading.

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Fed Monetary Policy: When Will Lift-Off Occur?

Percent

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Fed Monetary Policy: How High Will Rates Go?

Percent

59 T-Bill yields in December, 2005-14, November of 2015; Treasury-derived forward rates for 2016-20, observed Nov. 18, 2015

Short Rates Not Expected To Exceed 3%

Percent

60 T-Bill yields in December, 2005-14, November of 2015; Treasury-derived forward rates for 2016-30, observed Nov. 18, 2015

In Sum: The Economic Outlook for 2016 §  The U.S. economy should continue to grow moderately. §  The St. Louis economy will struggle with slow population growth. §  The Fed is likely to raise rates soon but not very far or fast.

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Q & A Session

Raffle

2015 Printable Slides If you are interested in accessing the slides shown today, please go to www.royalbanksofmo.com. You will find the 2015 Economic Forecast Breakfast Slideshow on our website.

Thank you for attending the

15

th

Annual

Economic Forecast Breakfast Equal Housing Opportunity

Member FDIC