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Christopher Wood christopher.wood@clsa.com +852 2600 8516<br />
Figure 12<br />
US bank loans plus non-financial commercial paper outstanding growth<br />
9<br />
(%YoY)<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
Jan 12<br />
Apr 12<br />
Jul 12<br />
Oct 12<br />
Jan 13<br />
Apr 13<br />
Jul 13<br />
Oct 13<br />
Jan 14<br />
Apr 14<br />
Jul 14<br />
Oct 14<br />
Jan 15<br />
Apr 15<br />
Jul 15<br />
Oct 15<br />
Jan 16<br />
Apr 16<br />
Jul 16<br />
Oct 16<br />
Jan 17<br />
Apr 17<br />
Jul 17<br />
Oct 17<br />
Jan 18<br />
Apr 18<br />
Jul 18<br />
Oct 18<br />
Source: CLSA, Federal Reserve<br />
Figure 13<br />
US bank deposit growth<br />
12<br />
11<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
Jan 00<br />
(%YoY)<br />
Sep 00<br />
May 01<br />
Jan 02<br />
Sep 02<br />
May 03<br />
Jan 04<br />
Source: CLSA, Federal Reserve<br />
Sep 04<br />
May 05<br />
Jan 06<br />
Sep 06<br />
May 07<br />
Jan 08<br />
Sep 08<br />
May 09<br />
Jan 10<br />
Sep 10<br />
May 11<br />
Jan 12<br />
Sep 12<br />
May 13<br />
Jan 14<br />
Sep 14<br />
May 15<br />
Jan 16<br />
Sep 16<br />
May 17<br />
Jan 18<br />
Sep 18<br />
If the above stance on the US looks very bearish, it is only fair for GREED & fear to point out that<br />
there is a risk to the above base case. This is that the positive side of the Trump economic agenda,<br />
namely tax cuts and deregulation as opposed to the negative of tariffs, revive the animal spirits in<br />
the American economy. A potential sign of this is the recent pickup in top-line revenue growth. Thus,<br />
S&P500 sales rose by 10.7% in 3Q18 following the 11.2% growth in 2Q18, the highest growth rate<br />
since 2Q11. The macro data also shows a similar trend, with total business sales, including<br />
manufacturers, retailers and merchant wholesalers, rising by 7.8% YoY in 2Q18 and 7.5% in 3Q18,<br />
the highest levels since 4Q11 (see Figure 14).<br />
Thursday, 3 January 2019 Page 7
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