BB&T Fixed Income Update


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Strategy & Outlook

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Economic and Market Recap July 31, 2016 U.S Equity Markets Index Russell Mega Cap 50 S&P 500 Russell 3000 Russell Mid Cap Russell 2000 Russell Growth Russell Value

YTD 6.70% 7.66% 7.74% 10.31% 8.32% 6.15% 9.38%

July 3.33% 3.69% 3.97% 4.57% 5.97% 4.72% 2.90%

Index EAFE MSCI Emerging Markets Euro-Zone Japan China Brazil

YTD 0.42% 11.77% -8.10% -13.80% -8.20% 29.60%

July 5.07% 5.03% 3.93% 5.66% 7.21% 6.92%

 Equity markets rallied in July with small and mid-caps outperforming large caps.  The rally pushed US equities further into positive territory for the year.  Technology and health care led the market higher – however, energy and utilities continue to lead for the year.

International Markets

 After trailing US markets over the past year, international stocks posted strong results in July.  Emerging markets have rallied in 2016 after sharp declines in 2015.  The Eurozone has lagged other global markets since the Brexit vote-but, has performed better than expected.

Rates, Currency, and Commodities Security 2 Ye ar UST 10 Ye ar UST "BBB" Corporate Yie ld Spre ad in BPS (1) Gold / oz. Oil (WTI) / barre l Euro, pe r $

12/31/2015 1.08% 2.31% 4.29% 202 $1,060 $36.60 € 0.92

7/30/2016 0.72% 1.52% 3.19% 167 $1,358 $41.60 € 0.89

Unemployment Rate Employment Participation Rate Core CPI (2) Leading Economic Indicators (3)

12/31/2015 5.1% 62.6% 2.11% 123.4

Most Recent 4.9% 62.7% 2.29% 123.7

 Interest rates have dropped across the maturity spectrum in 2016 with the 10-year Treasury hitting historic lows.  Yield spreads have tightened and the dollar has weakened since the beginning of the year.  Commodity prices have been volatile in 2016 as oil prices slumped in July after surging in the first half of the year.

U.S Economy

(1) Y ie ld s p re a d is B B B c o rp o ra te yie ld min u s 1--ye a r US Tre a s u ry yie ld .

 Growth remains sluggish – Q’2 GDP expanded a meager 1.2% following a weak 0.8% increase in Q’1.  Unemployment rate is below 5%. However, the participation rate is at historic lows and wage increases are weak.

(2 ) Co re CP I re fle c ts mo s t re c e n t tra ilin g 12 mo n th s . Co re CP I e xc lu d e s fo o d a n d e n e rg y p ric e s .

(3 ) Th e LE I In d e x is c o mp ris e d o f 10 e c o n o mic in d ic a to rs c o mp ile d b y th e Co mme rc e De p a rtme n t fo r th e p u rp o s e o f fo re c a s tin g fu tu re e c o n o mic g ro wth .

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Chart Sources: Russell, S&P, FactSet, Barclays, CRB, MSCI. BEA

2

Major Market Returns Year-to-Date Returns As of July 31, 2016 -10%

-5%

0%

5%

Russell Mega 50

10% 6.7%

S&P 500

7.7%

Russell 3000

7.7%

Russell MidCap

10.3%

Russell 2000

8.3%

Russell 1000 Growth

6.2%

Russell 1000 Value

9.4%

EAFE

0.4%

MSCI EM

11.8%

CRB Index Oil

15%

2.5% -7.2%

Gold

0.7%

Barclays 1-10 Municipal

3.7%

Barclays GCI

2.9%

Barclays Aggregate

4.2%

Barclays Interm. Credit

3.9%

MBS Index

3.9%

 After a volatile start to the year, the recent equity market rally has pushed stocks solidly into positive territory, with small and mid-caps outperforming large caps.

 International markets have been mixed with emerging markets outpacing developed markets.  The CRB Index advance has been led by a rebound in oil and gold. However, industrial commodities are down YTD.  The decline in interest rates across the maturity spectrum has pushed major bond indices higher. Data as of June 30, 2016. Source for both charts: Russell, S&P, Barclays, FactSet, MSCI

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3

Russell 3000 Characteristics Russell 3000 Returns by Characteristics Year-to-Date as of 7.31.2016 Low Beta

11.9%

High Yield

10.4%

Low P/E

8.6%

Large Cap

Low Risk Approach

7.9%

Russell 3000

7.7%

High P/E

-1.8%

Small Cap

-3.9%

Low Yield High Beta

-15%

-6.7% -10.3% -10%

-5%

0%

5%

10%

15%

 Equity investors have sought to avoid risk by focusing on low volatility, high dividend paying, and low P/E stocks

*Characteristic attribution is based on top versus bottom quintile within the Russell 3000 index.

Source: FactSet

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4

Russell 3000 Sectors Sector Returns Full Year 2015

Sector Returns Y-T-D as of July 31, 2016 Telecom Services

26.1%

Utilities

24.2%

Materials

13.0%

Energy

Cons. Discretionary Healthcare

9.5%

Russell 3000

Consumer Staples

9.3%

Financials

Russell 3000

7.7%

Industrials

Technology

7.6%

Telecom Services

Financials

6.8%

Consumer Staples

Industrials

6.2%

Healthcare

7.9%

Technology

12.2%

Cons. Discretionary

10.1%

5.6%

5.6%

0.5%

-1.6%

-2.6%

-3.4%

Materials

-5.4%

Utilities

-5.7%

Energy -21.1%

-0.5%

 There has been a significant shift in sector leadership in 2016 as investors have sought to reduce risk and generate income. *Characteristic attribution is based on top versus bottom quintile within the Russell 3000 index.

Source: FactSet

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5

Market Leadership: Year-Over-Year Returns

(%)

+50 +40 +30 +20 +10 + +10 +20 +30 +40 +50

Stocks vs. Bonds 12/31/86 – 7/31/16

 Stock returns relative to bonds diverge dramatically over market cycles. Recent volatility in the equity market has offered bonds the opportunity to keep pace with stocks on a year-overyear basis. This further supports the benefits of asset class diversification.

Barclays Aggregate Outperforms S&P 500 Outperforms 1987 1989 1990 1991 1992 1994 1995 1996 1997 1999 2000 2001 2002 2004 2005 2006 2007 2009 2010 2011 2012 2014 2015

Large Cap vs. Small Cap 12/31/86 – 7/31/16

+40

Russell 2000 Outperforms

+30

S&P 500 Outperforms

+20 (%)

+10 + +10 +20 +30 +40

 There can be significant dispersion of returns within U.S. equity markets which is why we believe in equity asset class diversification. Large caps have outperformed small-caps in recent years primarily due to a reduced appetite for risk in the uncertain environment.

1987 1989 1990 1991 1992 1994 1995 1996 1997 1999 2000 2001 2002 2004 2005 2006 2007 2009 2010 2011 2012 2014 2015

Source for both charts: eVestment Analytics.

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6

Long Term Market Returns Five Year Annualized Returns As of July 31, 2016

Three Year Annualized Returns As of July 31, 2016 Russell Mega 50

11.1%

S&P 500

11.2%

Russell 3000

10.6%

Russell MidCap

10.4%

Russell 2000

12.9%

Russell 1000 Value

9.0%

EAFE

2.0%

MSCI EM

-0.3%

CRB Index Oil Gold Barclays 1-10 Municipal Barclays GCI

1.2%

13.3%

S&P 500

13.4%

Russell 3000

13.0%

Russell MidCap

12.7%

Russell 2000

6.7%

Russell 1000 Growth

Russell Mega 50

10.4%

Russell 1000 Growth

13.6%

Russell 1000 Value

12.8%

EAFE

3.0%

MSCI EM

-2.8%

CRB Index

-2.6%

Oil-15.4%

-9.1%

Gold

0.7%

3.7% 2.9%

-3.8%

Barclays 1-10 Municipal Barclays GCI

3.3% 2.7%

Barclays Aggregate

4.2%

Barclays Aggregate

3.6%

Barclays Interm. Credit

3.9%

Barclays Interm. Credit

3.8%

MBS Index

3.9%

MBS Index

2.9%

 U.S. stocks have outperformed other asset classes by a wide margin over the long term.  Bonds have delivered consistently attractive returns over the same period. CONFIDENTIAL - NOT FOR PUBLIC DISTRIBUTION

7

Equity Market Volatility And The Long Term Trend S&P 500 12/31/06 - 7/31/16

2500 2300

-12.7% -10.1%

2100

-12.9%

-5.1%

1900

-5.4% -7.1%

1700

-11.4% -8.1% -19.3% -6.6%

1500

-15.7% -7.9%

1300 1100

+227%

-5.3%

900

-54%

700

Jun-16

Mar-16

Dec-15

Jun-15

Sep-15

Dec-14

Mar-15

Sep-14

Jun-14

Mar-14

Sep-13

Dec-13

Jun-13

Dec-12

Mar-13

Sep-12

Jun-12

Mar-12

Sep-11

Dec-11

Jun-11

Dec-10

Mar-11

Jun-10

Sep-10

Mar-10

Sep-09

Dec-09

Jun-09

Dec-08

Mar-09

Jun-08

Sep-08

Mar-08

Sep-07

Dec-07

Jun-07

Dec-06

Mar-07

500

 Following the market’s decline of over 50% from 2007 into the first quarter of 2009, equity markets are up over 200% from March, 2009 to July, 2016.  However, the market’s rise has been accompanied by many sharp corrections. There have been 14 corrections of greater than 5% over the period – with 6 drops of over 10%.  The pace of 10% or more corrections during this bull market cycle is consistent with historical volatility. Pullbacks of greater than 10% have occurred about every 15 months versus the long term historical average of every 18 months. CONFIDENTIAL - NOT FOR PUBLIC DISTRIBUTION

8

Long-Term Equity Market Returns

S&P 500 Rolling 10-Year Returns 12/31/25 – 7/31/16 25.0%

20.0%

15.0%

median = 10.1% 10.0%

7.8% July, 2016

5.0%

0.0%

10 Yr Rolling Returns

Dec-15

Dec-13

Dec-11

Dec-09

Dec-07

Dec-05

Dec-03

Dec-01

Dec-99

Dec-97

Dec-95

Dec-93

Dec-91

Dec-89

Dec-87

Dec-85

Dec-83

Dec-81

Dec-79

Dec-77

Dec-75

Dec-73

Dec-71

Dec-69

Dec-67

Dec-65

Dec-63

Dec-61

Dec-59

Dec-57

Dec-55

Dec-53

Dec-51

Dec-49

Dec-47

Dec-45

Dec-43

Dec-41

Dec-39

Dec-37

Dec-35

-5.0%

Median

Sources: eVestment Analytics

 As of the end of July the S&P 500 is up 7.8% annualized over the past 10 years. Although the market’s recovery has been strong since the bull market began in early 2009, 10 year stock returns remain well below the long-term average of 10.1%. This gives comfort that the long term trend in equity prices is not extended.

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9

Global Equity Market Returns

Trailing 12 Months Ending 7/31/16 Euro-Zone* Russia

-10.3%

Canada

6.1%

*Eurozone comprised of 17 countries that use the Euro as its currency. Largest constituents include Germany, France and Italy.

0.6%

China -11.1%

U.K. U.S.

Japan

-11.3%

-3.5%

5.6%

Hong Kong

Mexico

-3.1%

-10.2%

Brazil

India

Australia

17.4%

-3.0%

3.5%

Source: S&P; MSCI

 International equity markets over the past year experienced dramatic dispersion relative to U.S. stocks – with most major global markets in negative territory.  Global markets continue to confront political unrest, commodity deflation, and a slowdown in emerging market growth expectations.

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10

Case for International Markets Year-Over-Year Relative Performance EAFE vs. Emerging Markets

Year-Over-Year Relative Performance EAFE vs. S&P 500

12/31/88 – 7/31/16

12/31/88 – 7/31/16

+40

+60

+30

+40

+20

+20

+

(%)

+

+20

+10

+40

+20 +30

+60

+40

+80 1988 1989 1990 1991 1992 1993 1993 1994 1995 1996 1997 1998 1998 1999 2000 2001 2002 2003 2003 2004 2005 2006 2007 2008 2008 2009 2010 2011 2012 2013 2013 2014 2015

1988 1989 1990 1991 1992 1993 1993 1994 1995 1996 1997 1998 1998 1999 2000 2001 2002 2003 2003 2004 2005 2006 2007 2008 2008 2009 2010 2011 2012 2013 2013 2014 2015

(%)

+10

EAFE Outperforms

S&P 500 Outperforms

Emerging Markets Outperform

Source: eVestment

Global Percentage Market Cap Breakdown (U.S. vs. Non-U.S.) 1970 U.S.

U.S.

As of 6/30/16

Non-U.S.

1.20

57%

31%

Source: eVestment

Forward P/E Ratio: EAFE / S&P 500

2015 Non-U.S.

EAFE Outperforms

EAFE overvalued vs. S&P

1.05 Median 0.95

0.90 0.75

Sep-14

Dec-15

Jun-13

Dec-10

Mar-12

Jun-08

Sep-09

Dec-05

Mar-07

Jun-03

Sep-04

Mar-02

Sep-99

Dec-00

Jun-98

Mar-97

Dec-95

Jun-93

Sep-94

Dec-90

Mar-92

Source: International Monetary Fund (IMF), Russell Investments

0.60 Jun-88

43%

Sep-89

69%

EAFE undervalued vs. S&P

Source: MSCI, S&P, World Bank, FacgtSet, Bloomberg

 International markets move in cycles relative to U.S. markets exhibited by extended periods of underperformance followed by periods of outperformance.  Global markets continue to grow relative to domestic markets with over half of the world market capitalization traded outside of the U.S. In addition, current valuations are historically attractive relative to domestic stocks. CONFIDENTIAL - NOT FOR PUBLIC DISTRIBUTION

11

Fixed Income Markets: Trailing 12 Months 10 Year Treasury Spread vs. BBB As of 7/31/16

7.0%

 The BBB-rated corporate yield versus Treasuries continued to narrow in July with the spread tightening from 195 basis points in late June to 165 at month end.

6.0% 5.0% 4.0%

3.0% 2.0% 1.0% 0.0%

Source: Bloomberg; Barclays Capital Treasury Yield Curve As of 7/31/16

 The yield curve has flattened over the past year as short term rates have drifted marginally higher while long rates have declined.

3.50

7/31/16

Yield (%)

3.00

One Month Ago

2.50

One Year Ago

2.00

 The 10 year Treasury bond yield closed July at 1.50%. However, following the Brexit vote the 10-year traded down to historic lows of 1.35%-1.40%.

1.50 1.00 0.50 0.00 3 Month

6 Month

1 Year

2 Year

5 Year

7 Year

10 Year

30 Year

Source: FactSet

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12

Our Current View and Strategy Strengths

Strengths

Strengths

 Economic growth expected to be positive and steady in 2016.  Valuations remain marginally positive based on P/E, P/B and dividend yield.  Corporate balance sheets are very strong – high cash and low debt levels – aggressive share buybacks, dividend increases, and rising M&A activity.  U.S. markets continue to be viewed globally as a safe haven with strong fundamentals.  Long term rolling returns are below historic norms.

 Unique investment opportunities in various regions exist as non-U.S. markets now represent over 50% of global capitalization – our emphasis is currently on developed markets vs. emerging markets.

 Monetary policy to remain moderately accommodative as the Fed is expected to further delay any rate hikes until late 2016 .

 Expect higher than U.S. growth in many non-U.S. economies over the next 3-5 years – offering opportunities for market appreciation.

 Growing pressure to reduce government debt/spending.

Concerns

Concerns

Concerns

 Global growth concerns are expected to persist – especially in emerging markets.  Market’s significant rise in recent years makes continued volatility probable.  Uncertainty over the timing and pace of the Fed’s shift in monetary policy in 2016  Earnings outlook dependent on continued economic expansion.  Geopolitical risk - especially with recent developments in Iraq and Syria, and continuation of uncertainty in Russian Mid East policy.

 “Brexit” vote by the U.K. creates significant unknowns for the global markets.  Emerging market growth expectations (especially in China) have slowed in recent quarters causing investor concerns and increased volatility in their equity markets.  Political, economic, social, and military unrest and uncertainty in Syria and throughout the Middle East.

 Persistently large budget deficits.  Possible credit concerns relating to a collapse in oil prices.  Fed’s successful launch and execution of rate hikes over the next year.  Risk associated with emerging market debt – China and India slowdown, and pervasive geopolitical unrest.

We are positive on the long-term outlook for U.S. equities. We expect positive earnings growth, low inflation, and strong corporate balance sheets will help stocks move higher over the next several years. In addition, the U.S.’s position as a global economic leader should continue to attract capital. Markets will also benefit from rising M&A activity and additional share buyback programs. However, we do expect significant volatility as issues are resolved around fiscal and monetary policy – and global growth uncertainty.

We want to have an active exposure to the international markets. We believe global economic and financial markets continue to be a cornerstone of a diversified portfolio. Although these markets can generate significant volatility, the long-term benefit from exposure to global markets is positive. Our current bias is towards developed markets versus emerging markets.

We are positioning our portfolios more defensively by maintaining short to neutral maturity positions relative to benchmarks and focusing on higher coupon bonds. We believe the improving economy is expected to eventually put upward pressure on long term rates. We favor overweighting high quality corporate bonds relative to Treasury and Agency securities. Our high quality bias is expected to provide enhanced liquidity during this transition period. Municipal bonds have been attractively priced relative to taxable securities for the past several years – however, recently that relationship has become more normalized.

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13

 Valuations of many international equity markets are attractive relative to the U.S.

 Corporate credit fundamentals improving.

 Continued low inflationary pressures.

Yellen’s Dashboard of Labor Market Indicators Labor Force Participation Rate

Unemployment and Underemployment (U-6) 67%

20% 18%

66%

16% 14%

65%

12% 10%

64%

8% 6% 4%

Total Unemployment Rate

63%

U-6 Rate

2% 0% Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

62% Dec-07

NonFarm Payrolls MoM Change

Thousands 600

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

Average Hourly Earnings Growth YoY 4%

400 200 3%

0 -200 -400

2%

-600 -800 -1000 Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

1% Dec-07

Dec-08

Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

Data as of 06.302016. Sources: Bureau of Labor Statistics, Department of Labor

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14

State Unemployment Rate – May 2016 New Hampshire 2.7% Vermont 3.1%

Washington 5.8%

Montana 4.2%

North Dakota 3.2%

Oregon 4.5%

Nevada 6.1%

Massachusetts 4.2%

Minnesot a 3.8%

Wyoming 5.6%

Iowa 3.9%

Nebraska 3.0% Utah 3.8%

California 5.2%

Colorado 3.4%

New York 4.7%

Wisconsin 4.2%

South Dakota 2.5%

Idaho 3.7%

Illinois 6.4%

Indiana 5.0%

Ohio 5.1%

Oklahoma 4.7%

New Mexico 6.2% Texas 4.4%

Mississip Alabama 6.1% pi 5.8%

Louisiana 6.3%

Alaska 6.7%

Hawaii 3.2%

Arkansas 3.8%

<3.9%

Pennsylvania 5.5%

4.0 – 4.9%

Connecticut 5.7% New Jersey 4.9% Delaware 4.1%

West Virginia Virginia 6.2% 3.8%

Maryland 4.5% Washington DC 6.1%

Kentucky 5.1% Tennessee 4.1%

Arizona 5.6%

Rhode Island 5.4%

Michigan 4.7%

Missouri 4.3%

Kansas 3.7%

Maine 3.5%

North Carolina 5.1% South Carolina 5.6% Georgia 5.3%

Florida 4.7%

5.0 – 5.9%

6.0+%

Note: State Data Preliminary from May 2016. Source: Bureau of Labor Statistics

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15

Housing By Metropolitan Area

14%

Year-Over-Year Returns (Case-Shiller 20 Home Markets)

12% 10% 8% 6% 4% 2%

0%

30% 20%

May 2014

May 2015

May 2016

10% 0% -10% -20% -30% -40% -50%

 The housing market is slowly improving across all major geographic markets – however, home prices remain well below peak levels set in 2007. Data as of 05.31.2016. Source: Standard & Poor's

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16

Inflation Outlook Oil 07/31/11 - 07/31/16

Consumer Price Index

6.0

Headline CPI

5.0

$120

Core CPI

$110

4.0

$100

3.0

$90

2.0

$80

1.0

$70

-

$60

(1.0)

PCE Price Deflator

5.0

Jul-16

Apr-16

Jan-16

Oct-15

Jul-15

Jan-15

Apr-15

Jul-14

Oct-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Jan-12

Apr-12

Jul-11

Jan-16

Jun-16

Aug-15

Oct-14

Mar-15

Dec-13

May-14

Jul-13

Feb-13

Sep-12

Apr-12

Nov-11

Jan-11

Jun-11

Aug-10

Oct-09

Mar-10

May-09

Jul-08

Dec-08

Feb-08

Sep-07

Apr-07

Nov-06

Jan-06

$30

Jun-06

$40

(3.0)

Oct-11

$50

(2.0)

Gold 07/31/11- 07/31/16 $1,900

4.0

Headline PCE

Core PCE

$1,800

3.0

$1,700

2.0

$1,600 $1,500

1.0

$1,400

-

$1,300

(1.0)

$1,200

 Inflation measures remain steady, though not at levels that threaten to undermine U.S. growth. Key wage inflation remains subdued.

Jun-16

Mar-16

Dec-15

Jun-15

Sep-15

Dec-14

Mar-15

Jun-14

Sep-14

Mar-14

Sep-13

Dec-13

Jun-13

Mar-13

Sep-12

Dec-12

Jun-12

Dec-11

Mar-12

Sep-11

Jun-11

Mar-11

Sep-10

Dec-10

Jun-10

Dec-09

Mar-10

Jun-16

Jan-16

Aug-15

Oct-14

Mar-15

Dec-13

May-14

Jul-13

Feb-13

Sep-12

Apr-12

Nov-11

Jun-11

Jan-11

Aug-10

Mar-10

Oct-09

May-09

Dec-08

Jul-08

Feb-08

Sep-07

Apr-07

Nov-06

Jan-06

Jun-06

All Chart Sources: Bureau of Economic Analysis, The Federal Reserve, FactSet.

$1,000

Sep-09

$1,100

(2.0)

 After rallying in the 2Q oil prices rolled over in July on news of rising inventories and global growth concerns. Gold prices continued to move higher as investors sought to mitigate risk.

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17

Leading Economic Indicators

Composite Index of 10 Leading Indicators (2004=100) 12/31/94 - 6/30/16

Indicators 110.0

 Week by Hours (Manufacturing) 105.0

 Jobless Claims  Manufacturing New Orders for Consumers

100.0

 Manufacturing New Orders for Non-Defense  Vendors Performance  Building Permits

95.0 90.0

 S&P 500 Performance

85.0

 Money Supply (M2)  Interest Rate Spread (10 yr Treasury vs. Fed Funds)

80.0

 Consumer Confidence

75.0

Source: U.S. Conference Board



The Leading Economic Indicators (LEI) Index is released monthly and is comprised of 10 indicators that have shown to forecast the future direction of the business cycle.



The current LEI remains marginally below pre-recession highs – however, 7 of 10 indicators are in positive territory and the trend remains positive. The driver of lower LEI data has primarily been the pull back in equity prices and a flattening of manufacturing activity.

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18

Economic Outlook

 Signs of economic improvement continue – albeit gradual.  Inflation is low and not expected to rise.  Consumer confidence and spending is strengthening.  Strong corporate balance sheets continue as a positive.  M&A activity, dividend increases, and share buybacks positive.

 Gridlock in Washington continues with the Presidential race giving rise to future uncertainty.  “Brexit” vote in the U.K. adds uncertainty to the global economic environment.  Employment data positive, but continues to be relatively weak.

 Personal incomes growing - albeit slowly.

 Housing improving, but at a modest pace.

 Positive trend in leading economic indicators.

 Global security concerns are rising with several terrorist incidences occurring this year.

Outlook The combination of a modest improvement in housing, employment, and business spending should keep economic growth in positive territory over the next several quarters. However the pace of growth is expected to continue below previous postrecession levels. Geopolitical concerns and Washington’s uncertainty will overhang the economy but should not derail the gradual recovery. Positive corporate earnings, consumer confidence, an uptick in capital spending, and a rise in the Leading Economic Indicators foretell future growth. There will also be gains realized from a rising trend in M&A activity and share repurchases which should further help the recovery. Our view of 2016 calls for GDP growth to be incrementally better in the 2.0%2.25% range for the full year. However, in light of first half preliminary GDP growth at 1.2% our 2016 forecast may be revised lower.

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Sterling Capital Disclosure

The opinions contained in the preceding commentary reflect those of Sterling Capital Management LLC, and not those of BB&T Corporation or its executives. The stated opinions are for general information only and are not meant to be predictions or an offer of individual or personalized investment advice. They are not intended as an offer or solicitation with respect to the purchase or sale of any security. This information and these opinions are subject to change without notice. Any type of investing involves risk and there are no guarantees. Sterling Capital Management LLC does not assume liability for any loss which may result from the reliance by any person upon such information or opinions. Investment advisory services are available through Sterling Capital Management LLC, a separate subsidiary of BB&T Corporation. Sterling Capital Management LLC manages customized investment portfolios, provides asset allocation analysis and offers other investment-related services to affluent individuals and businesses. Securities and other investments held in investment management or investment advisory accounts at Sterling Capital Management LLC are not deposits or other obligations of BB&T Corporation, Branch Banking and Trust Company or any affiliate, are not guaranteed by Branch Banking and Trust Company or any other bank, are not insured by the FDIC or any other federal government agency, and are subject to investment risk, including possible loss of principal invested.

CONFIDENTIAL - NOT FOR PUBLIC DISTRIBUTION

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