Chart Book - Tenet Wealth Partners
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Chart Book AS OF NOVEMBER 30, 2021 Securities offered through Sanctuary Securities, member FINRA and SIPC. Advisory services offered through Sanctuary Advisors, LLC, an SEC registered investment advisor.
Economic Perspective
The U.S. economy slowed to a modest annual rate of 2.1% in the July-September quarter according to the government’s second
read of the data, slightly better than its first estimate. But economists are predicting a solid rebound in the current quarter as long
as rising inflation and a recent uptick in COVID cases do not derail activity. The Federal Reserve Bank of Atlanta’s GDPNow
model estimate for real GDP growth in the fourth quarter of 2021 is 8.7% as of December 9.
Economic Growth
Contributions to Percent Change in Real GDP (Annualized Q/Q % Change)
45%
Personal Consumption Private Investment Government Expenditures Net Exports Real GDP
35%
25%
15%
5%
-5%
-15%
-25%
-35%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: U.S. Bureau of Economic Analysis (Reported quarterly) 3U.S. consumer prices increased at the fastest pace in nearly 40 years in November. The consumer price index rose 6.8% last
month from a year ago. Following November’s inflation numbers, the Federal Reserve is likely to more quickly scale back its asset
purchase program. Economists now predict that pace will be doubled so that the stimulus program ends in March, which would
give the Fed more flexibility to raise interest rates sooner next year. The first interest rate increase is expected in June, with roughly
two more planned for later in the year.
Inflation Outlook
Consumer Price Index (Core) and Personal Consumption Expenditures Price Index (Core) (Y/Y % Change)
6%
Recessions
PCE Less Food and Energy
CPI Less Food and Energy
5%
Fed Target
4%
3%
2%
1%
0%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Source: U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis (Reported monthly) 4The U.S. LEI rose sharply in October suggesting the current economic expansion will continue into 2022 and may even gain some
momentum in the final months of this year. However, rising prices and supply chain bottlenecks pose challenges to growth and
are not expected to dissipate until well into 2022. Despite these headwinds, The Conference Board forecasts growth to remain
strong in the fourth quarter at a 5.0% annualized rate, before moderating to a rate of 2.6% in Q1 2022.
U.S. Economic Outlook
Leading Economic Index (Six-Month Moving Average of the Six-Month Rate of Change)
10%
5%
0%
-5%
-10%
-15%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Source: Conference Board (Reported monthly) 5The rate of global economic expansion edged higher in November, as output rose at the quickest pace for four months. Growth
was underpinned by rising intakes of new business, stronger inflows of new export business and continued job creation. Price
pressures remained elevated, however, with rates of increase in input costs and output charges holding close to recent highs.
Global Economic Outlook
Manufacturing Purchasing Managers Index (PMI) (A PMI over 50 represents growth in manufacturing)
75
US China UK EuroZone Japan Germany Expansion/Contraction Level
70
65
60
55
50
45
40
35
30
25
2006 2008 2010 2012 2014 2016 2018 2020 2022
Source: ISM, Markit 6According to FactSet, the bottom-up target price for the S&P 500 over the next 12 months is 5225, which is 10.9% above the
closing price of 4712. At the sector level, the Communication Services (+22.0%) and Energy (+19.2%) sectors are expected to see
the largest price increases, as these sectors have the largest upside differences between the bottom-up target price and the
closing price. On the other hand, the Utilities (+6.2%) sector is expected to see the smallest price increase, as this sector has the
smallest upside difference between the bottom-up target price and the closing price.
Corporate Profitability
S&P 500 Operating Earnings Per Share and Revenue Per Share Growth (Y/Y % Change)
70%
S&P 500 Operating EPS Growth (LTM) S&P 500 Revenue Growth (LTM)
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: S&P Dow Jones Indices (Reported monthly) 7Consumer confidence moderated in November. Expectations about short-term growth prospects ticked up, but job and
income prospects ticked down. Concerns about rising prices and, to a lesser degree, the Delta variant were the primary drivers
of the slight decline in confidence. The Conference Board expects this to be a good holiday season for retailers and confidence
levels suggest the economic expansion will continue into early 2022. However, both confidence and spending will likely face
headwinds from rising prices and a potential resurgence of COVID-19 in the coming months.
Consumer Outlook
Consumer Sentiment & Confidence Indexes Personal Saving Rate (Seasonally Adjusted Annual Rate)
160 Recessions 40%
140 Consumer Sentiment 35%
Index 1st Quarter 1966=100
Consumer Confidence 30%
120
25%
100
20%
80
15%
60 10%
40 5%
20 0%
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
Disposable Personal Income Per Capita (Y/Y % Change) Personal Consumption Expenditures (Y/Y % Change)
35% 40%
30%
30%
25%
20% 20%
15%
10%
10%
5% 0%
0%
-10%
-5%
-10% -20%
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
Source: Thompson Reuters/University of Michigan, Conference Board, U.S. Bureau of Economic Analysis (Reported monthly) 8Exhausted. Frustrated. Stretched. Those are all reasonable emotions for home shoppers to be feeling right now. After all, home
prices rose faster this year than any period in U.S. history. Between September 2020 and September 2021, U.S. home prices
notched a 19.5% gain. While there's a consensus in the real estate industry that price growth will decelerate—the current growth
rate simply isn't sustainable long term—there is not a consensus of what the rate of U.S. home price growth will look like in 2022.
Housing Market Outlook
Housing Affordability (higher = more affordable) Median Selling Price of New and Existing Homes
240 450,000
Recessions
220 400,000
New Homes
200
350,000 Existing Homes
180
300,000
160
250,000
140
120 200,000
100 150,000
80 100,000
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
Fixed Rate Mortgage Average in the United Housing Starts, Existing Home Sales and
States© New Home Sales (000's)
12% 8,000
Recessions Recessions
10%
30 Yr Mortgage
6,000 Existing Home Sales
8% 15 Yr Mortgage
New Home Starts
6% 4,000
New Home Sales
4%
2,000
2%
0% 0
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
Source: National Association of Realtors, Freddie Mac, U.S. Bureau of the Census (Reported monthly) 9U.S. employment growth slowed considerably in November. The survey of businesses showed nonfarm payrolls increased by
210,000 jobs, the fewest since last December. But the economy created 82,000 more jobs than initially reported in September
and October. That left employment 3.9 million jobs below the peak in February 2020. The Fed will see the report as more than
adequate to stay on course to accelerate tapering of asset purchases at the December meeting, implying an end to purchases
in March. Hiring continues to be hampered by worker shortages.
Labor Market Outlook
Jobs Gained/Lost (000's) with 12-Month Moving Average Labor Market Slack (000's)
10,000 50,000
Recessions
5,000 Not in Labor Foce, Want a Job Now
40,000
0 Part-Time for Economic Reasons
-5,000 30,000 Unemployed
-10,000 20,000
Recessions
-15,000
All Employees, Total Nonfarm 10,000
-20,000
12 per. Mov. Avg. (All Employees, Total Nonfarm)
-25,000 0
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
Wage Growth (Y/Y % Change) Labor Force Participation Rate
5% 70%
4% 68%
3% 66%
2% 64%
1% 62%
0% 60%
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
Source: U.S. Bureau of Labor Statistics, (Reported monthly, Wage Growth reported quarterly) 10Bond Market Perspective
The U.S. Federal Reserve rhetoric turned increasingly hawkish over the course of the month. Chairman Powell and other
members of the policy committee suggested tapering could be accelerated and that they may stop referring to inflation as
“transitory”. Nevertheless, the U.S. 10-year Treasury yield fell from 1.56% to 1.43% over the month, with an intra-month high of
1.69%. The yield curve flattened further, as the 2-year yield rose 4 basis points while the 30-year yield fell 15 basis points.
U.S. Treasury Market
U.S Treasury Yield Curve Historical U.S. 10-Year Treasury Rate
3% 10%
8%
2%
6%
4%
1%
11/30/2021
2%
10/31/2021
11/30/2020
0% 0%
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22
10 Yr
15 Yr
20 Yr
30 Yr
1 Yr
2 Yr
3 Yr
4 Yr
5 Yr
6 Yr
7 Yr
8 Yr
9 Yr
1M
Current U.S. Treasury Yields by Maturity
3%
2% 1.85% 1.78%
1.36% 1.43%
1.14%
1% 0.81%
0.52%
0.24%
0.11% 0.05% 0.10%
0%
1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
Source: U.S. Department of Treasury 12Global Fixed Income Returns by
Bellwether Index
1%
0.5%
0.3%
0.1%
0.0%
0%
-1% -0.7%
-1.2% -1.1%
-1.3% -1.3%
-1.4%
-2%
-2.6%
-3%
-4%
-5%
-6%
MTD YTD -5.9%
-7%
BB US BB US BB US BB US BB Global BB Global
Aggregate Aggregate Int Gov/Credit Gov/Credit Int Aggregate Ex US Emerging Mkts
Source: Bloomberg Barclays (BB) 13Domestic Fixed Income Returns by Maturity
and Credit Quality
Domestic Bond Market - Taxable
4% 3.4%
MTD YTD
3%
2% 1.3%
1% 0.4% 0.3%
0.0% 0.2%
-0.1%
0%
-0.1%
-1% -0.3% -0.5%
-0.9% -1.0%
-2% -1.4% -1.6%
-1.7%
-3% -2.2%
Short Intermediate Long AAA AA A BBBDomestic Corporate Bond Yields
Historical Corporate Bond Market Yield to Worst
10%
8%
6%
4%
2%
Investment Grade Corporate High Yield
0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Current Corporate Bond Market Yields by Credit Quality
8% 7.5%
7%
6% 5.3%
5%
3.8%
4%
3% 2.6%
1.8% 2.1%
2% 1.5%
1%
0%
AAA AA A BBB BB B CCC
Investment Grade Corporate bonds are represented by the Bloomberg Barclays U.S. Corporate Investment Grade index. High Yield bonds are represented by the Bloomberg Barclays
U.S. Corporate High Yield index. Source: Bloomberg Barclays 15Domestic Taxable Bond Spreads
Current Bond Spreads Compared to 15-Year Range and 15-Year Average
2,000
Spread over Treasury Bond (bps)
High Low Current Avg
1,800
1,600
1,400
1,200
1,000
800
600
400
337
200
99 123
57 81
15 36 15
-
Agency Corporate Securitized AAA AA A BBBEquity Market Perspective
Risk aversion escalated in November driving global equities lower. Risk off sentiment was driven by increasing inflation concerns,
hawkish Fed communication and the emergence of the Omicron variant. Equity market losses were widespread with MSCI EAFE
suffering the worst followed by emerging markets. In the U.S., the NASDAQ stayed positive while the S&P 500 dipped. Within the
S&P 500, Information technology and consumer discretionary were the top and only positive performing sectors while financials
were the worst.
Global Equity Returns by Bellwether Index
Global Equity Markets
25%
23.2%
MTD YTD
21.3%
20%
15%
11.5%
10%
6.2%
5%
0.3%
0%
-0.7%
-2.1%
-5% -3.5% -3.9%
-4.8%
-10%
DOW SP500 NASDAQ MSCI EAFE IMI MSCI Emerging Mkts IMI
Source: S&P Dow Jones, NASDAQ, MSCI 18Domestic Equity Returns by Market Cap & Style
Domestic Equity Markets
30%
28.1%
MTD YTD
26.2%
25% 23.2%
22.9%
20.8%
20%
17.8%
16.1%
15%
12.3% 12.3%
10%
5%
2.4%
1.7%
0.4%
0%
-0.6%
-3.5% -3.0% -3.4%
-5% -4.2% -3.8%
-4.2%
-4.9%
-10%
Mega Large Mid Small Large Mid Small Large Mid Small
Cap Cap Cap Cap Growth Growth Growth Value Value Value
Asset classes are represented by the following benchmarks: Russell Top 50 (Mega), Russell Top 200 (Large), Russell Midcap (Mid), Russell 2000 (Small). Source: Russell 19Domestic Equity Returns by Sector
MTD S&P 500 Returns by Sector
Information Technology 4.4%
Consumer Discretionary 2.0%
Materials -0.5%
S&P 500 -0.7%
Real Estate -0.9%
Consumer Staples -1.1%
Utilities -1.7%
Health Care -3.0%
Industrials -3.5%
Energy -5.1%
Communication Services -5.2%
Financials -5.7%
-8% -6% -4% -2% 0% 2% 4% 6%
YTD S&P 500 Returns by Sector
Energy 50.0%
Real Estate 32.6%
Financials 30.7%
Information Technology 30.1%
Consumer Discretionary 24.7%
S&P 500 23.2%
Communication Services 18.6%
Materials 18.3%
Health Care 15.7%
Industrials 15.0%
Consumer Staples 7.6%
Utilities 7.3%
0% 10% 20% 30% 40% 50% 60%
Source: S&P Dow Jones 20Domestic Equity Valuations by Sector
Trailing 12 Month P/E Ratio Compared to 10-Year Range and 10-Year Average
50
High Low Current Avg
45
41.9
40
35.9
35 34.4
30
25 24.5 24.1 23.7
21.8 21.2
20 19.7 20.5
19.4
15
13.4
10
5
0
SP500
Energy
Utilities
Technology
Industrials
Consumer
Financials
Communication
Discretionary
Health
Materials
Estate
Information
Care
Real
Consumer
Staples
Services
P/E ratios are based on trailing 12 months earnings (LTM) excluding negative earnings. The length of each bar represents the Range of the highest and lowest P/E ratio over the past 10
years. Average represents the average P/E ratio over the past 10 years. Current represents the most recent month. Source: Bloomberg 21Economic Indicator Descriptions
Real Gross Domestic Product (GDP): GDP is a basic measure of U.S. economic output Consumer Sentiment Index (MCSI): The MCSI uses telephone surveys to gather
adjusted for inflation. Alternatively, it can be thought of as the final value of all goods information on consumer expectations regarding the overall economy. The MSCI is
and services produced within the U.S. Positive GDP growth signals an expanding becoming more useful for investors because it gives a monthly snapshot of whether
economy. consumers feel like spending money by accessing their views on the business climate,
personal finance, and spending in order to judge their level of optimism/pessimism. This
Consumer Price Index (CPI): Measuring the change in the CPI provides an estimate for is important because consumer spending accounts for a large portion of U.S. GDP.
inflation. The CPI tracks the price of a basket of consumer goods and services. High
inflation or deflation (negative inflation) can be signs of economic worry. CPI is typically Disposable Personal Income per Capita (DPI): DPI is the amount of money that
reported in two ways: headline and core CPI. Headline CPI includes all categories that households have available for spending and saving after income taxes have been
comprise the CPI basket of goods and services. accounted for. DPI is monitored to gauge the overall state of the economy.
Personal Consumption Expenditure Chain-type Price Index (PCEPI): Measuring the Personal Consumption Expenditures (PCE): PCE consists of the actual and imputed
change in the PCEPI provides an estimate for inflation. In comparison to CPI, which uses expenditures of households including durables, non-durables and services.
one set of expenditure weights for several years, this index uses expenditure data from
the current period and the preceding period. This price index method assumes that the Retail Sales: The retail sales report captures in-store sales as well as catalog and other
consumer has substituted from goods whose prices are rising to goods whose prices are out-of-store sales. The report also breaks down sales figures into groups such as food
stable or falling. Core PCEPI, which is closely monitored by the Fed, strips out the more and beverages, clothing, and autos. The results are often presented two ways: with and
volatile Food and Energy categories. without auto sales being counted, because their high sticker price can add
extra volatility to the data.
Conference Board Index of Leading Economic Indicators (LEI): The LEI is designed to
signal peaks and troughs in the business cycle. The ten components include: average Housing Affordability Index (HAI): Published monthly by the National Association of
weekly manufacturing hours; average weekly initial claims for unemployment Realtors, the HAI index has a value of 100 when the median-income family has sufficient
insurance; manufacturers’ new orders for consumer goods and materials; ISM® Index of income to purchase a median-priced existing home. A higher index number indicates
New Orders; manufacturers‘ new orders for nondefense capital goods excluding that more households can afford to purchase a home.
aircraft orders; building permits for new private housing units; stock prices of 500
Unemployment Rate: Calculated monthly by the Bureau of Labor Statistics, the
common stocks; Leading Credit Index™; interest rate spread on 10-year Treasury bonds
unemployment rate is a gauge of the health of the U.S. labor market. High
less federal funds and average consumer expectations for business conditions.
unemployment can stifle the growth of the economy.
The Institute for Supply Management (ISM) PMI Index: The PMI is a composite index of
Wage Growth: Calculated quarterly by the Bureau of Labor Statistics, the employment
five "sub-indicators", which are extracted through surveys to purchasing managers from
cost index measures the growth of employee compensation (wages and benefits). The
around the country. The five sub-indexes are: Production, New orders, Supplier
index is based on a survey of employer payrolls in the final month of each quarter. The
deliveries, Inventories and Employment level. An Index value over 50 indicates
index tracks movement in the cost of labor, including wages, fringe benefits and
expansion; below 50 indicates contraction.
bonuses for employees at all levels of a company. We are using the wage component
The Institute for Supply Management (ISM) Non-manufacturing Index (NMI): The NMI is a of this index.
composite index of four "sub-indicators", which are extracted through surveys to
purchasing managers. The four sub-indexes: Business activity, New orders, Employment,
Supplier deliveries. An Index value over 50 indicates expansion; below 50 indicates
contraction.
Consumer Confidence Index (CCI): The Consumer Confidence Index is a well-known
proxy for the attitudes of U.S. consumer towards the business climate, personal finances
and spending. This index attempts to measure the confidence that consumers have in
the overall economy. This is important because consumer spending accounts for a
large portion of U.S. GDP.
22Benchmark Descriptions
U.S. Aggregate Bond: The Barclays U.S. Aggregate Bond Index measures the Large Cap vs. Small Cap: Large companies tend to be more established companies
performance of USD-denominated, SEC-registered, investment-grade, fixed-rate or step and therefore exhibit lower volatility. Over an extended period of time, expected
up, taxable bonds. The index includes bonds from the Treasury, Government-Related, returns of small cap companies are often higher due to the risks associated with smaller,
Corporate and MBS, ABS, and CMBS sectors. Securities included in the index must have less established companies.
at least one year until final maturity.
Value vs. Growth: Value companies typically trade at discount valuations and may pay
U.S. Treasury: The Barclays Capital U.S. Treasury Index measures the performance of a dividend. Growth companies are those that are experiencing greater earnings
public obligations of the U.S. Treasury with a remaining maturity of one year or more. growth prospects.
U.S. Agency: The Barclays Capital U.S. Agency Bond Index measures the performance Mega Cap: The Russell Top 50 Index measures the performance of the top 50 largest
of the agency sector of the U.S. government bond market and is comprised of companies in the Russell 1000 Index, which represents approximately 40% of the total
investment-grade USD-denominated debentures issued by government and market capitalization of the Russell 1000 index.
government-related agencies, including FNMA. The index includes both callable and Large Cap: The Russell Top 200 Index measures the performance of the 200 largest
non-callable securities that are publicly issued by U.S. government agencies, quasi- companies in the Russell 1000 Index, which represents approximately 68% of the total
federal corporations, and corporate and foreign debt guaranteed by the U.S. market capitalization of the Russell 1000 index.
government.
Mid Cap: The Russell Midcap Index measures the performance of the 800 smallest
U.S. Corporate: The Barclays Capital U.S. Corporate Bond Index measures the companies in the Russell 1000 Index, which represent approximately 36% of the total
performance of publicly issued USD-denominated corporate and Yankee debentures market capitalization of the Russell 1000 Index.
and secured notes that meet specified maturity, liquidity, and quality requirements.
Small Cap: The Russell 2000 Index measures the performance of the 2,000 smallest
U.S. MBS: The Barclays Capital U.S. Mortgage Backed Securities Index measures the companies in the Russell 3000 Index, which represents approximately 8% of the total
performance of mortgage-backed pass-through securities of Ginnie Mae (GNMA), market capitalization of the Russell 3000 Index.
Fannie Mae (FNMA), and Freddie Mac (FHLMC).
Large Cap Growth: The Russell 1000 Growth Index measures the performance of those
U.S. Municipal Bond: The Barclays Capital Municipal Bond Index measures the Russell 1000 index companies with higher price-to-book ratios and higher forecasted
performance of the USD-denominated, investment grade, fixed-rate tax exempt bond growth values.
market. The index has four main sectors: state and local general obligation bonds,
Large Cap Value: The Russell 1000 Value Index measures the performance of those
revenue bonds, insured bonds and pre-refunded bonds. Securities included in the index
Russell 1000 companies with lower price-to-book ratios and lower forecasted growth
must have at least one year until final maturity.
values.
General Obligation Bond Index: The Barclays General Obligation Bond Index measures Mid Cap Growth: The Russell Midcap Growth Index measures the performance of those
the average market-weighted performance of general obligations securities that have Russell Midcap companies with higher price-to-book ratios and higher forecasted
been issued in the last five years with maturities greater than one year. growth values.
Revenue Bond Index: The Barclays Revenue Bond Index measures the average market- Mid Cap Value: The Russell Midcap Value Index measures the performance of those
weighted performance of revenue backed securities that have been issued in the last Russell Midcap companies with lower price-to-book ratios and lower forecasted growth
five years with maturities greater than one year. values.
Investment Style: Performance of different types of stocks will vary over time. A Small Cap Growth: The Russell 2000 Growth Index measures the performance of those
common way to characterize a stock is by market capitalization (e.g., large cap or Russell 2000 Index companies with higher price-to-value ratios and higher forecasted
small cap) or style (e.g., value or growth). growth values.
Small Cap Value: The Russell 2000 Value Index measures the performance of those
Russell 2000 Index companies with lower price-to-book ratios and lower forecasted
growth values.
23Disclaimer Regarding Content
Sanctuary makes no representation as to the accuracy or completeness of information contained herein. The information is
based upon data available to the public and is not an offer to sell or solicitation of offers to buy any securities mentioned herein.
Any investment discussed may not be suitable for all investors. Investors must make their own decisions based on their specific
investment objectives and financial circumstances. Investments are subject to risk, including but not limited to market and
interest rate fluctuations. Any performance data represents past performance which is no guarantee of future results.
Prices/yields/figures mentioned herein are as of the date noted unless indicated otherwise. All figures subject to market
fluctuation and change. Additional information available upon request.
Securities offered through Sanctuary Securities, member FINRA and SIPC.
Advisory services offered through Sanctuary Advisors, LLC, an SEC registered investment advisor.
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