From: Paul Morris PY Sent: 7/2/2019 4:24:45 PM To: [email protected] Subject: Capital Market Outlook Capital Market Outlook Chief Investment Office Capital Market Outlook from our Chief Investment Office delivers a balanced mix of macroeconomic insights and global market views, with in-depth analysis from the CIO's investment strategists and analysts. It offers timely commentary that can help you navigate markets and take advantage of emerging trends across the globe. This week's topics are: e Macro Strategy: Why 2%? — While Federal Reserve policy has always been focused on the goal of price stability, the specific meaning of price stability has been refined over the years from a general and non- specified, vague concept to the current very specific Paul Morris quantitative definition of a 2% long-run average for the Managing Director personal consumption expenditures deflator. We describe | Private Wealth Manager the evolution and rationale for the more specific target. Merrill Private Wealth Management ° Global Market View: Global R&D: From Apollo, ONE BRYANT PARK to Apple, to Alibaba? — The recent unfolding tech cold STE 28TH FLOOR war between the U.S. and China will likely only accelerate NEW YORK, NY 10036 the pace of spending on global research and development P| as the two parties vie for technological supremacy. China faces significant technological hurdles, while the U.S. needs to rethink and rebalance the role of public and private sector research and development spending. ° Thought of the Week: A Golden Diversifier — Gold’s recent outperformance versus the U.S. dollar has potentially triggered a bullish technical pattern. In our HOUSE_OVERSIGHT_016801