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Chart 33: Correlation of sector EPS to global GDP since 2010 Chart 34: Trailing vs forward EPS CAGR - ranked by difference BANKS Basic Resources BASIC RESOURCE Oil & Gas REALSTATE Telecom CHEMICALS Construction & Materials RETAIL Retail TECHNOLOGY Auto & Parts INDS GDS & SVS Stoxx 600 HEALTH CARE Banks PERS & H/H GDS Media = m5yr | TELECOM Utilities Trailing FOOD & BEV Industrial Goods & Sevices CAGR OIL & GAS HealthCare — m 3yr Fwd TRAVEL & LEIS Chemicals CAGR INSURANCE Real estate MEDIA Food & Bev Technology AUTO & PARTS Personal & Household goods FINANCIAL SVS (nerarerriea GEN MAL Financial Services UTILITIES Travel & Leisure -20% 0% 20% 40% 60% 80% 100% 30 20 40 0 40 20 Source: BofA Merrill Lynch Global Research, Datastream, IBES Source: BofA Merrill Lynch Global Research, Datastream, IBES Earnings revisions trends. Basic Resources show strongest revisions trends and revisions are still improving relative to trend, in light of the strong upside recently for many metals prices. Autos revisions are next strongest and also show some positive momentum. More broadly most sectors are not showing an improvement in the trend on earnings revisions. Revisions are weakest in Tech having deteriorated more than other sectors over the past six weeks. The improvement in Financials revisions continues and Banks and Financial Services are now in positive territory. Chart 35: 3-month average EPS revisions ratios (ERR) by sector Chart 36: Revisions improving in most sectors (ERR 6wk avg vs 3m avg) 12% 4% m= Momentum: last 6 weeks vs 3-month 10% 3% a sae & Trend (3m avg) EPS revisions average EPS revision ratio (%) ) Bi 2% 6% 1% 4% ; 2% O% ‘0 -1% 0% ° 99 2% 2th -A% 3% 6% 4% SEOFRANAMADADAHE HDA FZTPE*”A RK SEREMOHR COMA HA HM H=~a SPFHHFHMAA”R Gof ® 6 ° SO=zr~s~ onus SH’ so oO oO = Soot Sf ® ee on 6 Oo PSagir gs Bessy sO$ sess PBSLSS ESCORT SSASESSSER SePfsa SSS Se mastirer Ag SPEGSES Oot -weme Prt s eB p22 38 G@aertt esreaS2 a8 epee * = ® 8 re) En SO es ®9EeEecVnE o> 85 oS Iie © & Cw = & [ae rm oO E 2 E 2 oO oO Source: BofA Merrill Lynch Global Research, Datastream, IBES Source: BofA Merrill Lynch Global Research, Datastream, IBES 5: Bankot America 14 European Equity Strate: 01 December 2016 i P quity By | Merrill Lynch HOUSE_OVERSIGHT_014473