2Q:2017 CAPITAL MARKETS OUTLOOK (Video)

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Historical analysis and current forecasts do not guarantee future results. Past performance does not guarantee future results. As of March 31, 2017, unless specified otherwise.
Displays (2): Returns
Global high yield, global corporates, and Japan and euro-area government bonds in hedged USD terms. All other non-US returns in unhedged USD terms. Emerging-market debt returns are for dollar-denominated bonds as represented by the J.P. Morgan Emerging Markets Bond Index Global. An investor cannot invest directly in an index, and its performance does not reflect the performance of any AB portfolio. The unmanaged index does not reflect the fees and expenses associated with the active management of a portfolio. Real Estate Investment Trusts. Returns reflect HFRI index returns.
Investing involves risk, including loss of principal. This document is for informational purposes only and does not constitute investment advice. This material does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AllianceBernstein L.P. or its affiliates.
Source: Barclays, FactSet, FTSE, HFR, J.P. Morgan, Morningstar, MSCI, S&P Dow Jones and AB
Display: Manufacturing PMI
Source: Bloomberg, Haver Analytics, IHS Markit and Morgan Stanley
Display: Headline vs. Core Inflation
Through January 31, 2017. G4 is the Eurozone, Japan, UK and US. Source: Bureau of Economic Analysis, Haver Analytics, US Bureau of Labor Statistics and AB
Display: Fiscal Stimulus is Getting Started
As of October 5, 2016. Source: International Monetary Fund and AB
Display: Gradual Official Rate Hikes Likely to Continue
Source: Bloomberg Barclays, US Federal Reserve and AB
Display: Time Erases Pain of Rising Rates
Rising-rate environments are defined as periods during which the US 10-year Treasury yield rose by more than 100 basis points. Source: Bloomberg Barclays and AB
Display: Local-Currency Debt Offers Higher Yields than US High Yield
EM local is represented by J.P. Morgan Government Bond–Emerging Markets. An investor cannot invest directly in an index, and its performance does not reflect the performance of any AB portfolio. The unmanaged index does not reflect fees and expenses associated with the active management of a portfolio. Source: Bloomberg, J.P. Morgan and AB
Display: In Uncertain Times, Balancing Credit and Interest-Rate Exposure Is Critical
For illustrative purposes only. Source: AB
Display: Stocks Have Fared Well in Times Of Rising Bond Yields…
Not all sectors perform the same. As of February 28, 2017. Based on peak to trough rate cycles for the corresponding periods of S&P 500. Rising-rate environments are defined as periods during which the US 10-year Treasury yield rose by more than 70 basis points. Source: Bloomberg, S&P and AB
Display: Changing Composition of Forecasted Returns
As of December 31, 2016. The forecasted figures utilize book value and price-to-book valuations instead of earnings and price to earnings. Historical data are for the S&P 500. Next five years is the median AB proprietary forecast for a similar group of stocks. Source: FactSet, MSCI, S&P and AB
Display: Profitability (ROE)
Data are based on the highest 20% of earnings growth and ROE among 1,500 of the largest US-listed stocks by market capitalization in the AB equity universe, excluding 33 companies that do not currently have a P/E ratio because they are not profitable. Source: FactSet, Russell Investments and AB Bernstein
Display: Small-Caps Would Benefit More from Tax Rate Cut
As of December 31, 2016. An investor cannot invest directly in an index, and its performance does not reflect the performance of any AB portfolio. The unmanaged index does not reflect the fees and expenses associated with the active management of a portfolio. Based on median 2015 effective tax rate for S&P 500 and Russell 2000. Excludes real estate and negative-pretax-income companies. Source: Bloomberg, FactSet, Russell Investments, Thomson Reuters I/B/E/S and AB
Display: Low Sensitivity to Traditional Asset Classes
Shows five-year betas as of March 21, 2017. Stocks are represented by MSCI World; credit by Bank of America Merrill Lynch US High Yield Masters II; rates by Bloomberg Barclays US Treasury 7–10 Year. Source: Bank of America Merrill Lynch, Hedge Fund Research, Morningstar, MSCI and AB
Display: Evergreen Advice
Source: AB

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