Economic Outlook Video & Transcript

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Economic Outlook | Winter 2018

Description: In this video, Dr. Anthony Chan delivers a presentation in front of a white screen that displays graphs and charts illustrating his data.

On Screen: Black text on a white screen.

Text on Screen: J.P. Morgan

Boxed Disclosure: INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • 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

Description: Upbeat electronic music plays.

Description: A montage of a bustling city, a stock market ticker board, and Economist Dr. Anthony Chan. Dr. Chan — a man with short black hair — wears a gray business suit. He walks, speaks, and shakes hands with colleagues. Then, Dr. Chan gives a talk to a group of people in a conference room. White text appears over the scene.

On Screen: Quarterly Economic Commentary with Anthony Chan.

On Screen: Dr. Chan sits at a small table with two men in suits. Then, a white screen with black text.

On Screen: The Bipartisan Recovery. Winter 2018.

On Screen: A montage of Washington D.C. landmarks appears, including the Washington Monument and the Capitol Building. Next, Dr. Chan delivers his lecture in front of a white screen. Text briefly appears at the bottom of the screen.

Anthony Chan: This quarter we're turning our attention overseas.

On Screen: A montage of beautiful European cities. Next, Dr. Chan delivers his lecture in front of a white screen. Text briefly appears at the bottom of the screen.

Text on Screen: Anthony Chan, PhD. Chief Economist for Chase.

Anthony Chan: While you may not see any sign of it in Washington DC, bipartisanship is now emerging in an unexpected place -- the US economy. Economic growth appears to be stable across Democratic and Republican administrations, despite the increasing polarization of our politics.

On Screen: Blue text appears in quotations, briefly, on screen.

Text on Screen: “Economic Growth Appears To Be Stable Across Democratic And Republican Administrations.”

Anthony Chan: At this point, our economy can truly be termed a bipartisan recovery.

On Screen: Montage of busy city streets in Washington D.C. Then, a close-up of Dr. Chan.

Anthony Chan: Since the end of the Great Recession in 2009, inflation-adjusted growth has never reached as high as 3% or dropped below 1.5% for a full calendar year, regardless of the political party in charge.

Graph on screen: Next to Dr. Chan, a line graph appears labeled, “Real GDP Growth.” The graph shows the growth between 3% and 1.5% between the years 2010 – 2017.

On Screen: Close-up of the graph. Small black text appears at the bottom of the screen.

Text on Screen: Source: Haver Analytics.

On Screen: Scenes of Washington DC. Then scenes of financial analysts in a bustling data center. Then, a close-up of Dr. chan.

Anthony Chan: The US economy grew at an annual rate of 2.1% in the first half of 2017 and is expected to stay around that level for the full year.

Graph on screen: Next to Dr. Chan, a graph appears labeled, “Real GDP Growth.” It shows growth having grown 2.1% in the first two quarters of 2017.

On Screen: Close-up of the graph. Small black text appears at the bottom of the screen.

Text on Screen: Source: Haver Analytics.

Anthony Chan: Inflation has also remained in a tight range of 1.3% to 1.9% since 2010 as measured by the Feds preferred Core Inflation Index.

On Screen: A montage appears of analysts monitoring financial data on large computer screens. Then, a close-up of Dr. Chan.

Anthony Chan: In the first half of this year, core inflation clocked in at an annual rate of 1.7%, fully in line with previous years.

Graph on screen: Next to Dr. Chan, a line graph appears that shows inflation between 1.3% and 1.9% between the years 2010 – 2017.

On Screen: Small black text appears at the bottom of the screen.

On Screen: Source: Haver Analytics.

On Screen: The National Gallery of Art. Then, a close-up of Dr. Chan.

Anthony Chan: Neither the Feds continuing interest rate hikes nor the gradual unwinding of its balance sheet, which began this fall, is likely to interrupt our slow but steady growth.

On Screen: Blue text, in quotations, briefly appears next to Dr. Chan.

Text on Screen: “Fed’s Rate Hikes And Balance Sheet Unwinding Are Unlikely To Interrupt Growth.”

Anthony Chan: One factor which could lead to a positive breakout is the administration's proposal to slash corporate and individual tax rates.

On Screen: The Washington Monument against a pink sky. next, the White House.

Anthony Chan: However, many questions surround this proposal.

On Screen: Close-up of Dr. Chan. Then financial analysts monitor data on their computer screens.

Anthony Chan: Will these tax cuts be approved by Congress? And if so, how low will rates go? Which tax breaks will be eliminated?

On Screen: Close-up of Dr. Chan.

Anthony Chan: Given the many unknowns, it is difficult to assess the potential impact. We currently expect tax cuts to have only a modest effect in the range of 0.2% or 0.3%.

On Screen: Blue text, in quotations, briefly appears next to Dr. Chan.

Text on screen: “We Currently Expect Tax Cuts To Have Only A Modest Effect In The Range Of 0.2% Or 0.3%.”

Anthony Chan: So why does the US stock market keep breaking records while the economy is running at such a lukewarm pace?

On Screen: A montage of Wall Street-related images appears, including: the New York Stock Exchange building, a trader speaking on the phone, and financial data on a computer screen.

Anthony Chan: Because corporate profits are growing by double digits in 2017, in part due to a weaker US dollar following two years of weaker earnings growth.

Chart on screen: Next to Dr. Chan, a bar chart appears labeled, “S&P 500 Earnings Growth,” shows corporate profits up to 12% in 2017.

On screen: Small black text appears at the bottom of the screen.

Text on screen: Source: Bloomberg.

On screen: Close-up of Dr. Chan.

Anthony Chan: The US economic recovery is now more than eight years old and is the third longest in US history.

On screen: Blue text, in quotations, briefly appears next to Dr. Chan.

Text on screen: “The U.S. Economic Recovery Is Now More Than Eight Years Old And Is The Third Longest In History.”

On screen: Small black text appears at the bottom of the screen.

Text on screen: Source: J.P. Morgan Key Investment Themes. November 2017.

On screen: A busy railway system. Next, financial data on computer screens. Next, financial analysts monitor their computer screens at a large data center with a stock market ticker board on the wall. Then a close-up of Dr. Chan. Then, Dr. Chan in front of a white background.

Anthony Chan: With or without the tax cuts, we believe the US economy and the bull market still have room to run.

On Screen: Fade to a white screen. Black text appears.

Text on screen: J.P. Morgan.

On Screen: Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. 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 J.P. Morgan Chase and Company. 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.

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. Investments in international or emerging markets can be more volatile and involve a greater degree of risk.

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