Markets Questions

What percent of GDP growth comes from consumption?

69%

What percent of GDP comes from investments?

17%

What percent of GDP comes from government?

23.5%

What percent of GDP comes from net exports?

-4.2%

What are the Feds goals?

inflation at 2%, unemployment at 4%

What is the GDP Growth Rate right now?

3.8%

What is GDP annual growth?

2.8%

What is the unemployment rate right now?

4.3%

What is the inflation rate right now?

3.5%

What are interest rates right now?

6.3% (30-year fixed) and 5.6% (15-year fixed)

What is our GDP right now?

$29 trillion

What percent is real estate of the S&P?

1.95%

What does NAFTA stand for?

North American Free Trade Agreement

Yield Outlook

We want the 10-year to stay higher than the 2-year, but right now short-term yields are the highest. If the government invests in long-term debt the short-term (1-3 month) yields should go down and the long term yields should go up. For the end of this year, the 10-year should stay the same or decrease slightly

What is a hedge fund?

a private investment fund actively managed by professional fund managers that uses money from wealthy firms/individuals to invest in a wide range of assets and generate high returns

What was the Dot Com Boom?

when people heavily invested in internet/tech stocks from 1995-2000 regardless of their valuations/profitability, so when the Feds hiked interest rates (made borrowing more expensive) in 2000 these companies failed to show profits, which caused panic selling and the bubble burst (NASDAQ fell by a significant margin)

What was the 2008 Recession?

Low interest rates allowed people with poor credit to get mortgages, but when interest rates increased these people defaulted. This caused panics/credit freezes and firms with significant holdings in mortgage-backed securities to go bankrupt. Implications spread beyond the U.S.

What was the Silicon Valley Bank crash?

In 2023 after SVB heavily invested in the tech sector, MBS, and low-yield US Treasuries the Fed hiked interest rates and the value of these bonds fell. When the bank’s financial situation went public many withdrew funds and SVB crashed

What is quantitative easing?

The central bank buys large amounts of government bonds and assets like MBS to increase liquidity in the market. This lowers interest rates and encourages borrowing/spending

What is quantitative tightening?

The central bank sells government bonds withou reinvesting them to reduce liquidity. This increases interest rates making borrowing more expensive, and helps curb inflation

What is stagflation?

When there’s high inflation, stagnant economic growth, and high unemployment (GDP is flat or declining, consumer spending is down, prices for goods are rising)

What is CPI?

Consumer Price Index- average change in prices paid by urban consumers for goods (inflation indicator) CPI rose 3.1% last year

What is PPI?

Producer Price Index- average change in selling prices received by domestic producers (inflation indicator)- Core PPI rose 2.8% from Aug 24-Aug 25

What is PCE?

Personal Consumption Expenditures- prices urban AND rural consumers are willing to pay for goods (inflation indicator) the Fed looks at Core PCE, which increased 2.9% Aug 24-Aug 25

What is the GDP equation?

GDP = C + I + G + (X - M)

What are the OPEC countries?

Algeria, Republic of Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, UAE, Venezuela

Who is the head of the Securities and Exchange Commission

Paul S Atkins

What are the NLF sectors in alphabetical order?

Communications, Consumer Discretionary, Consumer Staples, Energy, Financials, Healthcare, Industrials, IT, Materials, Real Estate, Utilities

What sectors will outperform?

Financials, Utilities, Energy, IT, REITs

What sectors will market perform?

Communications, Materials, Industrials

What sectors will underperform?

Consumer Discretionary, Consumer Staples, Healthcare

What would happen with negative rates?

Instead of banks paying you to hold your money, you would pay them. In theory this would force banks to lend more, but they can actually squeeze profits to the point where they lend less

What soft commodity would you pitch?

Coffee- Improving crop conditions (USDA forecasts record production 2025-2026), increased demand in Europe, promising crop conditions in Brazil, India, and Thailand

What is the relationship between bond price and interest rates?

They are inversely related- when rates go up prices go down, and when rates go down prices go up

What is the relationship between bond price and yield?

The higher a bond’s price, the lower its yield because an investor buying the bond would have to pay more for the same return

What is the relationship between bond yield and interest rates?

They have a direct relationship/move together (higher interest rates lead to more cash flows)

What is a bond and why is it safer?

Bonds are loans made to large organizations that promise to pay back the borrowed amount plus interest

Who is the Fed Chair

Jerome Powell (Janet Yellen 2014-2018)

Who are the Vice Fed Chairs

Phillip Jefferson and Michelle Bowman (Vice Chair for Supervision)

Who are the other Fed members?

Michael Bar, Lisa Cook, Stephen Miran, Christopher Waller

Where are the 12 Regional Federal Reserve Banks?

NY, Minneappolis, Philly, Dallas, Richmond, St. Louis, Chicago, Boston, San Francisco, Cleveland, Kansas City, Atlanta

Who is the leader of the US Central Bank?

Jerome Powell

Who is the leader of the Japanese Central Bank?

Kazuo Ueda

Who is the leader of the Chinese Central Bank?

Pan Gongsheng

Who is the leader of the European Central Bank?

Christine Lagarde (in Germany)

Who is the leader of the Indian Central Bank?

Sanjay Malhotra

Who is the leader of the Russian Central Bank?

Elvira Nabiullina

Who is the leader of the Canadian Central Bank

Tiff Macklem

Who is the leader of the English Central Bank?

Andrew Bailey

What is the difference between WTI and Brent Oil?

Brent comes from Europe (the North Sea between the Shetland Islands and Norway), WTI comes from the U.S. (Texas, Louisiana, and North Dakota)

Name 10 CEOs

Brian Cornell (Target), Jason McGowan (Crumbl), Brian Niccol (Starbucks)), Andrew Cathy (Chick-fil-a), Scott Boatwright (Chipotle), David Hoffman (Dunkin), Todd Graves (Canes), Chris Kempczinski (McDonalds), Doug McMillon (Walmart), Ron Vanchris (Costco)

What are the Real Estate subsectors?

Tower (18.33%, cell towers for communication service providers, 5G, outperform), Healthcare (14.15%, hospitals/senior living centers, aging population, neutral), Data Centers (14.60%, tech infrastructure, favorable supply and demand, ouperform), Retail (13.08%, stores/malls, neutral), Residential (13.02%, apartments/single-family homes, pricing power, outperform), Industrial (9.93%, warehouses/distribution facilities, reshoring/ecommerce, outperform), Storage (8.59%, self storage properties, weak demand/oversupply, underperform), Real Estate Services (6.49%, investment management, rebound in commercial real estate, outperform), Lodging (0.97%, hotels/resorts, declining travel, underperform), Office (0.94%, lease office space to firms, failed return-to-office initiatives, underperform)

Name 10 World Leaders

Donald Trump, Mark Carney (Canada), Vladimir Putin (Russia), Kim Jung Un (North Korea), Kier Starmer (UK), Giorgia Meloni (Italy), Pedro Sánchez (Spain), King Charles III (England), Xi Jinping (China), Pope Leo XIV (Vatican City), Narendra Modi (India)

What are the NLF Real Estate Holdings?

American Tower, Welltower, Prologis, Digital Reality Trust, American Homes 4 Rent

Which one would you buy?

Digital Realty Trust- growing demand for AI infrastructure/data centers benefits DRT pricing power/renewal rates (infrastructure expected to grow 33% every year from now to 2030), DRT megawatt centers are preleased (predetermined cash flows and reduced risk), DRT is following sustainability trends (renewable energy gives them a competitive edge)

Which one would you sell?

American Homes 4 Rent- single family housing has become less affordable (high mortgage/property tax rates), slow revenue growth (only 2-3% this year, less pricing power), less structured demand compared to other subsectors (DRT and AI, Prologis and ecommerce, Welltower and aging population, American Tower and 5G)

What is a REIT you would buy that NLF doesn’t currently hold?

Realty Income (O)- they pay consistently high monthly dividends (up to 5.7%), current occupancy rate is around 98.5% (high pricing power and renewal rates), their debt is fixed-rate which gives them stability in volatile markets

What non-Real Estate company that NLF holds would you sell?

Cava (Consumer Discretionary)- Slowing growth/overvalued (high P/E ratio yet they just reduced growth guidance), tariff and inflation pressures (input costs are increasing and the food industry is very competitive when it comes to price), the other CD holdings have less risk/volatility (Amazon and McDonalds have more loyal customers and diversified operations)

What non-Real Estate company do you think NLF should buy?

Eli Lilly (Healthcare)- dominance in GLP-1 industry (projected to exceed $100B from GLP-1s annually by 2030, obesity rate still expected to increase, oral GLP-1 developments), reshoring/manufacturing investments ($6B in Houston facility will limit impact from future tariffs), diversification and financial performance (38% YoY increase in Q2 2025, treatments in several health categories like Alzheimer’s)

What is your S&P Outlook/Drivers?

I expect the S&P to grow 2-3% to around 6800 in the next 12 months. My drivers are AI Investments (increased productivity/efficiency in all industries, boosted economic growth/profit margins, US leading in AI infrastructure), “Soft-Landing” Macroeconomic Data (moderating GDP, resilient consumer spending from high-income individuals, earnings resilience, cooling labor market), Government Intervention (tariffs encouraging domestic reshoring, fiscal tailwinds, 2 more expected rate cuts)

What is your Eurozone Outlook/Drivers?

Bullish- US Trade Deals (reduced tariffs on auto parts, pharmaceuticals, and aircrafts), Fiscal Stimulus/Lowering Inflation (inflation rate at 2.3% for the 4th consecutive month, pause in rate cuts, Germany stimilus package will boost GDP, increased defense spending), Labor Market (unemployment sitting at 5.9%, demand for AI-related jobs, tight labor market is increasing wages, projected 2M job additions next year)

What is your Brazil Outlook?

Bearish- Slowing GDP Growth (high interest rates slowing consumption/investing), Political Uncertainty (presidential election next year, polarized nation, U.S. tariffs are slowing exports, fall in commodity prices), Fiscal Risks (spending on pensions projected to exceed $1T, rising Debt-GDP ratio, increased public debt, waffly commitment to decreasing deficits)

What is your Russia Outlook?

Bearish- Slowing Growth/Exports (high interest rates are hurting investments, spending, and demand, inflation reached 6.8%, exhausted spending on war), Labor Shortages (war has decreased workforce, projected 11M person shortage by 2030), Global Tensions (war increases risk, civillian industries are contracting, price cap for crude oil is 15% below market, expanding sanctions on Russian goods)

What is your India Outlook?

Bullish- Increased Domestic Consumption (household spending increased 33% past 3 years, consumer spending projected to reach $2.49T, increased vehicle ownership and gas share, projected 6.5% GDP growth), Government Reforms (lower taxes on essentials, low interest R&D funding for tech startups, Reserve Bank of India easing corporate financing rules), Improved Wages/Exports (exports increased 9% from last year, service exports surged 10% from April-August, leading in export commodities like electronics, tea, meat, diary, etc)

What is your China Outlook?

Bearish- Slowing Growth (GDP slowing from 5% to 4.8%, reduction in fiscal stimulus, weak consumer confidence, decreased demand/price deflation), U.S Tariffs (October 10th Trump said he would put an additional 100% tariff, some products will have duties up 130%, EU is also imposing more tariffs on China), Slow Property Sales (3.8% price decrease for homes, economic uncertainty decreased home buying, 600-700 million square meters unsold)

What is your Outlook for South Africa?

Bearish- Slow Growth (projected GDP growth under 1%, high unemployment/poverty, unemployment at 33%, youth decreased consumer spending due to high debt/taxes and minimal wage growth), Trade Tensions (high U.S. tariffs causing job losses, on the Financial Action Task Force “grey list” which delays trade), High Government Debt (debt will make up 77% of GDP by the end of the year, debt-servicing costs are limiting infrastructure spending and growing faster than the economy, causes bottlenecks/shortages)

What is your Outlook on a random country?

Lichenstein (Bullish)- Economic Growth (GDP gaining momentum, increasing demand for industrial products, inflation lower than EU peers, wealth management, private banking, and tech manufacturing all in high demand, customs union with Switzerland), Strong Fiscal Policy/Budgeting (fbudget surplus expected to remain above 3%, social security funds provide an economic cushion and boost GDP, higher tax revenues, investments in national hospital)

What is your REIT Outlook?

Bullish- Reduced Supply (supply and demand projected to stabalize, decrease in supply of self-storage REITs, vacant offices being developed for other uses, less competition will improve occupancy rates, 18% revenue growth for data centers), Lower Interest Rates (Fed rate cuts lower REIT expenses, data centers and healthcare REITs in high demand, lower rates = higher valuations, rate cuts increase occupancy rates and rent)

What is your Oil Outlook?

Bearish- Excess Supply (increase in non-OPEC production, increased inventory tanks prices, high interest rates and dwindling energy consumption will slow demand), U.S. Production (13.5 M barrels/day in the next year, record high production in July, online LNG export capacity also increases natural gas production), Uncertain Demand (excess in supply and limited demand, mixed EV adoptions, ongoing wards continue to add risk, lower than expected consumption in Q2)

What is your Gold Outlook?

Bullish- Geopolitical Tensions (Trump announces increased tariffs on China, wars in the Middle East, economic uncertainty = investments in gold, government shutdown, gold reaching $4,000/oz), Weakening U.S. Dollar (declined 10-11% in the first half of 2025, inflation/tariff concerns, banks have increased demand for gold investments), Monetary Policy (possible 2 more rate cuts, since gold doesn’t pay dividends it’s more attractive when interest rates fall)

What is your Fed Outlook?

Sticky Inflation (PCE projected at 3% for 2025, pricing pressures/supply chain delays from tariffs, higher COI, slowly decreasing inflation- won’t reach 2% until 2028), Conservative Rate Cuts (only one projected cut in 2026, keeps mortgage rates/borrowing money expensive), Narrow Job Gains (rising unemployment, healthcare is hiring due to aging population, tax/rate cuts should increase jobs, slowed economic growth/tariff-driven inflation, reduced immigration)

What hard commodity would you pitch?

Silver- Demand (demand continues to increase and exceed supply, electronic industries need silver, “safe haven” like gold, hedge against inflation), Gold Performance ($4,000/oz, gold-50% increase, silver-70% increase, a high gold-to-silver ratio is a buying signal for silver, weak U.S. dollar)

What is a recent M&A deal?

Fifth Third Bank acquired Comerica Inc on October 6th for $10.9B. It was an all-stock transaction and created the 9th largest U.S. bank. The trade-off was 1.86 Fifth Third Bank common shares for each Comerica share, and Fifth Third now owns 73% of the combined entity.

What is a recent IPO?

Fermi Inc (FRMI) is a REIT that leases data centers that wants to build a massive AI data center with a self-powered infrastructure (with solar, nuclear, battery, or natural gas). They sold 32.5M shares (est 25M) at $21/share and on its first day of trading jumped 55% ($25 to $32.53)