By: Anirban BasuSage Policy Group, Inc.

October 21st, 2014

Back to the Future Part II

On Behalf of

The Loudoun County Chamber of Commerce

Raging Bull (1980)

Estimated Growth in Output by Select Global Areas2014 Estimates*

2.4%0.3%

1.3%2.7%

5.6%7.4%

6.5%0.2%

2.7%5.1%

4.4%2.2%2.3%

3.2%0.9%

1.3%-0.2%

1.4%0.4%

0.8%1.8%

-1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

MexicoBrazil

Latin America and CaribbeanMiddle East, North Africa, Afghanistan, & Pakistan

India**China

Developing AsiaRussia

Central/eastern EuropeSub-Saharan Africa

Emerging/developing countriesUnited States

CanadaUnited Kingdom

JapanSpain

ItalyGermany

FranceEuro area

Advanced economies

Annual % Change

*IMF Staff Estimates

The IMF’s global and regional growth figures for 2014 are based on new purchasing power parity (PPP) weights

derived from the recently released 2011 International Comparison Program survey .

**For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market

prices.

Source: International Monetary Fund, October 2014 WEO Database

Debt by Selected Country2014 Projected

0.0 50.0 100.0 150.0 200.0 250.0

Saudi Arabia

Russia

Indonesia

China

South Africa

Mexico

Argentina

India

Brazil

Germany

Canada

United Kingdom

France

Spain

United States

Italy

Japan

General Government Gross Debt in Percent of GDP

Source: International Monetary Fund, October 2014 WEO Database

Rank Exchange Index % Change

4 Tokyo SE Nikkei 225 56.7%

2 Nasdaq NASDAQ Composite 38.3%

1 NYSE Group DJI A 26.5%

6 Frankfurt SE DAX 25.5%

8 Bolsa De Madrid Madrid General 21.4%

12 Swiss Exchange Swiss Market 20.2%

5 Euronext CAC 40 18.0%

10 BorsaItaliana FTSE MIB 16.6%

3 London SE FTSE 100 12.0%

9 TSX Group S&P TSX Composite 9.6%

11 Hong Kong Exchanges Hang Seng Index 2.9%

7 Shanghai SE Shanghai Composite -6.8%

Top 12 Stock Exchanges 2013 Growth*

Source: Yahoo! Finance

*Change from the 2012 close to the 2013 close.

S&P Select Sector Performance12-Month Percent Change as of October 10th, 2014

Source: Standard & Poor’s

0% 5% 10% 15% 20% 25%

Energy

Telecommunication Services

Consumer Discretionary

Industrials

Materials

Financials

Consumer Staples

Utilities

Information Technology

Health Care

1.0%

4.1%

7.2%

7.7%

9.4%

11.7%

13.0%

13.2%

20.5%

23.4%

12-month percent change

Federal Reserve Balance Sheet v. S&P 500 IndexMay 2008 – October 2014*

Source: Federal Reserve Bank; Yahoo Finance

S&P 500 index depicted in orange

500

700

900

1100

1300

1500

1700

1900

2100

0.8

1.3

1.8

2.3

2.8

3.3

3.8

4.3

4.8

May

-08

Jul-

08

Sep

-08

No

v-0

8Ja

n-0

9M

ar-0

9M

ay-0

9Ju

l-0

9S

ep-0

9N

ov-

09

Jan

-10

Mar

-10

May

-10

Jul-

10S

ep-1

0N

ov-

10Ja

n-1

1M

ar-1

1M

ay-1

1Ju

l-11

Sep

-11

No

v-11

Jan

-12

Mar

-12

May

-12

Jul-

12S

ep-1

2N

ov-

12Ja

n-1

3M

ar-1

3M

ay-1

3Ju

l-13

Sep

-13

No

v-13

Jan

-14

Mar

-14

May

-14

Jul-

14S

ep-1

4

S&P 500FRB Credit Reserve$Trillions

*Through 10/8/2014

Second Quarter Earnings for Select CorporationsEarnings per Share

Symbol Q2 2013 Q2 2014

Estimated Q2 2014

Reported Surprise Symbol Q2 2013

Q2 2014 Estimated

Q2 2014 Reported

Surprise

CMG $2.82 $3.09 $3.50 $0.41 BTU $0.33 -$0.29 -$0.28 $0.01

COF $1.87 $1.82 $2.04 $0.22 DD $1.28 $1.17 $1.17 $0.00

UTX $1.70 $1.71 $1.84 $0.13 GE $0.36 $0.39 $0.39 $0.00

FCX $0.22 $0.51 $0.58 $0.07 MMM $1.71 $1.91 $1.91 $0.00

COH $0.89 $0.53 $0.59 $0.06 AMD -$0.09 $0.03 $0.02 -$0.01

TXN $0.58 $0.59 $0.62 $0.03 YHOO $0.35 $0.38 $0.37 -$0.01

DOW $0.64 $0.72 $0.74 $0.02 STI $0.68 $0.76 $0.72 -$0.04

HON $1.28 $1.36 $1.38 $0.02 UPS $1.13 $1.25 $1.21 -$0.04

VFC $0.32 $0.35 $0.36 $0.01 MCD $1.38 $1.44 $1.40 -$0.04

XRX $0.27 $0.26 $0.27 $0.01 MSFT $0.66 $0.60 $0.55 -$0.05

VZ $0.73 $0.90 $0.91 $0.01 CAT $1.45 $1.53 $1.69 -$0.16

Source: Yahoo! Finance

Jobs -0.7%

Incomes 2.7%

Profits 49.2%

Housing -10.5%

Stocks 25.9%

-60%

-40%

-20%

0%

20%

40%

60%

2008 2009 2010 2011 2012 2013

Per

cen

t ch

ange

sin

ce e

nd

of

200

7

Top Gun (1986)

Profits out of the Danger Zone

Source: BEA, BLS, S&P Case-Shiller, Yahoo! Finance

The Golden Child (1986)Highest Earning Hedge Fund Managers, 2013

Source: Forbes

Manager Hedge Fund Firm 2013 Earnings Net Return

George Soros Soros Fund Management $4 billion 22%

David Tepper Appaloosa Management $3.5 billion 42%

Steve Cohen SAC Capital Advisors $2.3 billion 19%

John Paulson Paulson Enhanced $1.9 billion 26%

Carl Icahn Icahn Enterprises $1.7 billion 31%

James Simons Renaissance Technologies $1.1 billion 18%

Ray Dalio Bridgewater Associates $900 million 5.25%

Ken Griffin Citadel $900 million 19.25%

Larry Robbins Glenview Capital $750 million 43%

Leon Cooperman Omega $730 million 25%

2013 S&P 500: +29.6%

Airplane! (1980)David Tepper’s Move against the Market

Source: Forbes, Bloomberg

2013 Appaloosa Management: +$3.5 billion (42%)

“Our big play versus the market is airlines. That’s a big play. We’re the biggest holder of all these different airlines. No hedge fund owned as many airlines as we did and not too many people did. Delta, UAL, LCC, US Air, AMR. We owned big percentages in all those stocks. And you know what, they did pretty good… pretty freaking good.” -David Tepper

Source: U.S. Bureau of Labor Statistics

Median Weekly Earnings, Full-Time U.S. Workers*2000Q2 through 2014Q2

*SA, Constant 1982-1984 dollars (adjusted to CPI-U)Wage and salary workers ages 16+

$320

$325

$330

$335

$340

$345

$350

200

0Q

2

200

0Q

4

200

1Q2

200

1Q4

200

2Q2

200

2Q4

200

3Q2

200

3Q4

200

4Q

2

200

4Q

4

200

5Q2

200

5Q4

200

6Q

2

200

6Q

4

200

7Q2

200

7Q4

200

8Q

2

200

8Q

4

200

9Q

2

200

9Q

4

2010

Q2

2010

Q4

2011

Q2

2011

Q4

2012

Q2

2012

Q4

2013

Q2

2013

Q4

2014

Q2

Gross Domestic Product1990Q1 through 2014Q2

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Pe

rce

nt

Ch

an

ge

fro

m P

rece

din

g P

eri

od

(S

AA

R)

2014Q2: +4.6%

Source: Bureau of Economic Analysis

Contributions to GDP Growth by Component 2013Q2 – 2014Q2

Source: Bureau of Economic Analysis

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

PersonalConsumption

GovernmentSpending

Net Exports Gross Investment

1.2

0.0

-0.5

1.01.4

0.0

0.6

2.52.5

-0.7

1.1

0.60.8

-0.2

-1.7

-1.1

1.8

0.3

-0.3

2.9

SA

AR

(%

)

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Ordinary People (1980)

-1000

-800

-600

-400

-200

0

200

400

600Ja

n-0

2M

ay-0

2S

ep-0

2Ja

n-0

3M

ay-0

3S

ep-0

3Ja

n-0

4M

ay-0

4S

ep-0

4Ja

n-0

5M

ay-0

5S

ep-0

5Ja

n-0

6M

ay-0

6S

ep-0

6Ja

n-0

7M

ay-0

7S

ep-0

7Ja

n-0

8M

ay-0

8S

ep-0

8Ja

n-0

9M

ay-0

9S

ep-0

9Ja

n-1

0M

ay-1

0S

ep-1

0Ja

n-1

1M

ay-1

1S

ep-1

1Ja

n-1

2M

ay-1

2S

ep-1

2Ja

n-1

3M

ay-1

3S

ep-1

3Ja

n-1

4M

ay-1

4S

ep-1

4

Th

ou

san

ds

Source: U.S. Bureau of Labor Statistics

September 2014: +248K

Net Change in U.S. Jobs, BLSJanuary 2002 through September 2014

National Nonfarm Employmentby Industry SectorSeptember 2013 v. September 2014

10

47

47

52

89

161

230

372

399

515

713

0 200 400 600 800

Information

Other Services

Government

Mining and Logging

Financial Activities

Manufacturing

Construction

Leisure and Hospitality

Education and Health Services

Trade, Transportation, and Utilities

Professional and Business Services

Thousands, SA

All told 2,635K Jobs gained

Source: U.S. Bureau of Labor Statistics

Virginia Nonfarm Employmentby Industry Sector Groups (SA)August 2013 v. August 2014Absolute Change

-11,200

-2,500

-1,400

-700

200

300

2,900

4,500

5,000

5,600

15,900

-15,000 -10,000 -5,000 0 5,000 10,000 15,000 20,000

Professional & Business Services

Trade, Transportation & Utilities

Government

Information

Mining and Logging

Manufacturing

Financial Activities

Construction

Leisure & Hospitality

Other Services

Education & Health Services

Source: Bureau of Labor Statistics

VA Total:

+18.6K; +0.5%

US Total (SA):

+2,551K; +1.9%

*According to the Local Area Unemployment Statistics (LAUS) series VA lost 38,298 jobs between August 2013 and August 2014.

Northern VA Nonfarm Employmentby Industry Sector Groups (NSA)August 2013 v. August 2014Absolute Change

-2,600

-2,100

-700

-600

600

1,100

1,800

2,300

3,000

3,100

-4,000 -2,000 0 2,000 4,000

Professional and business services

Information

Manufacturing

Education and health services

Trade, transportation, and utilities

Financial activities

Other services

Leisure and hospitality

Government

Mining, logging, and construction

Source: Bureau of Labor Statistics

Northern VA Total:

+5.9K +0.4%

VA Total (SA):

+18.6K; +0.5%

US Total (SA):

+2,551K; +1.9%

U.S. Year-over-year Percent Change: 1.9%

Employment Growth, U.S. States (SA) August 2013 v. August 2014 Percent Change

RANK STATE % RANK STATE % RANK STATE %

1 NORTH DAKOTA 4.4 18 MISSOURI 1.8 35 KANSAS 0.8

2 NEVADA 3.5 18 SOUTH CAROLINA 1.8 35 PENNSYLVANIA 0.8

2 TEXAS 3.5 20 MASSACHUSETTS 1.6 37 ILLINOIS 0.7

2 UTAH 3.5 20 MINNESOTA 1.6 37 MICHIGAN 0.7

5 FLORIDA 2.8 20 WISCONSIN 1.6 37 MISSISSIPPI 0.7

6 DELAWARE 2.7 23 ARKANSAS 1.5 37 NEW MEXICO 0.7

6 OREGON 2.7 23 LOUISIANA 1.5 37 SOUTH DAKOTA 0.7

8 NORTH CAROLINA 2.4 25 KENTUCKY 1.3 42 NEBRASKA 0.6

9 COLORADO 2.3 25 MAINE 1.3 43 IDAHO 0.5

10 GEORGIA 2.2 27 IOWA 1.2 43 VIRGINIA 0.5

11 CALIFORNIA 2.1 27 NEW YORK 1.2 45 MARYLAND 0.4

11 TENNESSEE 2.1 27 RHODE ISLAND 1.2 45 NEW HAMPSHIRE 0.4

11 WASHINGTON 2.1 27 WYOMING 1.2 45 VERMONT 0.4

14 ARIZONA 2.0 31 ALABAMA 1.1 48 CONNECTICUT 0.3

14 INDIANA 2.0 31 HAWAII 1.1 48 OHIO 0.3

14 OKLAHOMA 2.0 31 WEST VIRGINIA 1.1 50 NEW JERSEY 0.1

17 MONTANA 1.9 34 DISTRICT OF COLUMBIA 1.0 51 ALASKA -0.8

Source: U.S. Bureau of Labor Statistics

U.S. Unemployment Rate: 6.1%

Unemployment Rates, U.S. States (SA) August 2014RANK STATE % RANK STATE % RANK STATE %

1 NORTH DAKOTA 2.8 17 VIRGINIA 5.6 33 WEST VIRGINIA 6.6

2 NEBRASKA 3.6 17 WASHINGTON 5.6 36 ILLINOIS 6.7

2 SOUTH DAKOTA 3.6 17 WISCONSIN 5.6 36 NEW MEXICO 6.7

2 UTAH 3.6 21 OHIO 5.7 38 ALASKA 6.8

5 VERMONT 4.1 22 INDIANA 5.8 38 NORTH CAROLINA 6.8

6 HAWAII 4.3 22 LOUISIANA 5.8 40 ALABAMA 6.9

6 MINNESOTA 4.3 22 MASSACHUSETTS 5.8 41 ARIZONA 7.1

8 NEW HAMPSHIRE 4.4 22 PENNSYLVANIA 5.8 41 KENTUCKY 7.1

9 IOWA 4.5 26 ARKANSAS 6.3 43 OREGON 7.2

10 WYOMING 4.6 26 FLORIDA 6.3 44 CALIFORNIA 7.4

11 IDAHO 4.7 26 MISSOURI 6.3 44 MICHIGAN 7.4

11 MONTANA 4.7 29 MARYLAND 6.4 44 TENNESSEE 7.4

11 OKLAHOMA 4.7 29 NEW YORK 6.4 47 DISTRICT OF COLUMBIA 7.6

14 KANSAS 4.9 29 SOUTH CAROLINA 6.4 47 NEVADA 7.6

15 COLORADO 5.1 32 DELAWARE 6.5 49 RHODE ISLAND 7.7

16 TEXAS 5.3 33 CONNECTICUT 6.6 50 MISSISSIPPI 7.9

17 MAINE 5.6 33 NEW JERSEY 6.6 51 GEORGIA 8.1Source: U.S. Bureau of Labor Statistics

Unemployment Rates, 20 Largest Metros (NSA)August 2014

Rank MSA UR Rank MSA UR

1

Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area 3.8 9

Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area 6.3

2Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area 5.3 12

Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area 6.6

3Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area 5.4 12

St. Louis, MO-IL Metropolitan Statistical Area 6.6

3San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area 5.4 14

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area 6.7

5Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA 5.5 15

Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area 6.8

5Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area 5.5 16

Baltimore-Towson, MD Metropolitan Statistical Area 7.0

7Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area 5.6 17

Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area 7.7

8San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area 6.2 18

Detroit-Warren-Livonia, MI Metropolitan Statistical Area 7.9

9Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area 6.3 19

Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area 8.0

9New York-Northern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area 6.3 20

Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area 8.7

Source: U.S. Bureau of Labor Statistics

Loudoun County Unemployment RateAugust 2000 - August 2014

Source: Bureau of Labor Statistics

August-144.6%

0

1

2

3

4

5

6

7

Au

g-0

0

Feb

-01

Au

g-0

1

Feb

-02

Au

g-0

2

Feb

-03

Au

g-0

3

Feb

-04

Au

g-0

4

Feb

-05

Au

g-0

5

Feb

-06

Au

g-0

6

Feb

-07

Au

g-0

7

Feb

-08

Au

g-0

8

Feb

-09

Au

g-0

9

Feb

-10

Au

g-1

0

Feb

-11

Au

g-1

1

Feb

-12

Au

g-1

2

Feb

-13

Au

g-1

3

Feb

-14

Au

g-1

4

Un

em

plo

ym

en

t R

ate

Loudoun County EmploymentAugust 2000 - August 2014

Source: Bureau of Labor Statistics

Aug. 2013 v. Aug. 2015+1,584

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000A

ug

-00

Feb

-01

Au

g-0

1

Feb

-02

Au

g-0

2

Feb

-03

Au

g-0

3

Feb

-04

Au

g-0

4

Feb

-05

Au

g-0

5

Feb

-06

Au

g-0

6

Feb

-07

Au

g-0

7

Feb

-08

Au

g-0

8

Feb

-09

Au

g-0

9

Feb

-10

Au

g-1

0

Feb

-11

Au

g-1

1

Feb

-12

Au

g-1

2

Feb

-13

Au

g-1

3

Feb

-14

Au

g-1

4

12-M

on

th N

et

Ch

an

ge

Field of Dreams (1989)

15-Year & 30-Year Fixed Mortgage Rates February 1995 through October 2014*

Source: Freddie Mac

3.18%

3.97%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Feb

-95

Jul-

95

Dec

-95

May

-96

Oct

-96

Mar

-97

Au

g-9

7Ja

n-9

8Ju

n-9

8N

ov-

98

Ap

r-9

9S

ep-9

9F

eb-0

0Ju

l-0

0D

ec-0

0M

ay-0

1O

ct-0

1M

ar-0

2A

ug

-02

Jan

-03

Jun

-03

No

v-0

3A

pr-

04

Sep

-04

Feb

-05

Jul-

05

Dec

-05

May

-06

Oct

-06

Mar

-07

Au

g-0

7Ja

n-0

8Ju

n-0

8N

ov-

08

Ap

r-0

9S

ep-0

9F

eb-1

0Ju

l-10

Dec

-10

May

-11

Oct

-11

Mar

-12

Au

g-1

2Ja

n-1

3Ju

n-1

3N

ov-

13A

pr-

14S

ep-1

4

Rat

e

15-yr 30-yr

*Week ending 10/16/2014

U.S. New Home SalesJanuary 1999 through August 2014

Source: U.S. Census Bureau

August 2014504K

0

200

400

600

800

1,000

1,200

1,400

1,600

Th

ou

san

ds,

SA

AR

U.S. Housing StartsJanuary 1999 through September 2014

Source: U.S. Census Bureau

0

500

1,000

1,500

2,000

2,500

Jan

-99

May

-99

Sep

-99

Jan

-00

May

-00

Sep

-00

Jan

-01

May

-01

Sep

-01

Jan

-02

May

-02

Sep

-02

Jan

-03

May

-03

Sep

-03

Jan

-04

May

-04

Sep

-04

Jan

-05

May

-05

Sep

-05

Jan

-06

May

-06

Sep

-06

Jan

-07

May

-07

Sep

-07

Jan

-08

May

-08

Sep

-08

Jan

-09

May

-09

Sep

-09

Jan

-10

May

-10

Sep

-10

Jan

-11

May

-11

Sep

-11

Jan

-12

May

-12

Sep

-12

Jan

-13

May

-13

Sep

-13

Jan

-14

May

-14

Sep

-14

Th

ou

san

ds,

SA

AR

1 Unit 5 units or more

September 2014:1 Unit: 646K5 Units or more: 353K

U.S. Housing Building PermitsJanuary 1999 through September 2014

Source: U.S. Census Bureau

0

500

1,000

1,500

2,000

2,500

Jan

-99

May

-99

Sep

-99

Jan

-00

May

-00

Sep

-00

Jan

-01

May

-01

Sep

-01

Jan

-02

May

-02

Sep

-02

Jan

-03

May

-03

Sep

-03

Jan

-04

May

-04

Sep

-04

Jan

-05

May

-05

Sep

-05

Jan

-06

May

-06

Sep

-06

Jan

-07

May

-07

Sep

-07

Jan

-08

May

-08

Sep

-08

Jan

-09

May

-09

Sep

-09

Jan

-10

May

-10

Sep

-10

Jan

-11

May

-11

Sep

-11

Jan

-12

May

-12

Sep

-12

Jan

-13

May

-13

Sep

-13

Jan

-14

May

-14

Sep

-14

Th

ou

san

ds,

SA

AR

1 Unit 5 units or more

September 2014:1 Unit: 624K5 Units or more: 369K

0%

2%

4%

6%

8%

10%

12%

14%

3.8% 3.8% 4.0%

5.7%6.7% 6.7% 6.8%

7.4%8.4%

9.0%

10.3%11.0%

12.8%

12-M

on

th %

Ch

ange

S&P/Case-Shiller Home Price Indices for Select Metros July 2014, 12-Month Percentage Change

Source: Standard & Poor’s

Source: RealEstate Business Intelligence

Loudoun County Luxury Home Sales ($1 Million+)2000 - 2013

1731 31 41

119

337

257

186

8250 55

68 76 86

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Monthly Sales of Luxury HomesSeptember 2013: 6September 2014: 10

Loudoun County Housing Unit SalesJanuary 2001 through September 2014

Source: Northern Virginia Association of Realtors

September-14-8.9%

-60%

-40%

-20%

0%

20%

40%

60%

80%Ja

n-0

1M

ay-0

1S

ep-0

1Ja

n-0

2M

ay-0

2S

ep-0

2Ja

n-0

3M

ay-0

3S

ep-0

3Ja

n-0

4M

ay-0

4S

ep-0

4Ja

n-0

5M

ay-0

5S

ep-0

5Ja

n-0

6M

ay-0

6S

ep-0

6Ja

n-0

7M

ay-0

7S

ep-0

7Ja

n-0

8M

ay-0

8S

ep-0

8Ja

n-0

9M

ay-0

9S

ep-0

9Ja

n-1

0M

ay-1

0S

ep-1

0Ja

n-1

1M

ay-1

1S

ep-1

1Ja

n-1

2M

ay-1

2S

ep-1

2Ja

n-1

3M

ay-1

3S

ep-1

3Ja

n-1

4M

ay-1

4S

ep-1

4

Ye

ar-

ove

r-ye

ar

% c

ha

ng

e

Trend Line

*Figures include sales of attached, detached, and condos

The Shining (1980)

-2.5%

0.3%

0.6%

2.2%

2.4%

2.7%

2.7%

3.4%

5.4%

5.8%

6.0%

7.1%

9.5%

-5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 7.0% 9.0% 11.0%

Gasoline Stations

Furniture & Home Furn. Stores

Sporting Goods, Hobby, Book & Music Stores

Miscellaneous Store Retailers

Food & Beverage Stores

Clothing & Clothing Accessories Stores

General Merchandise Stores

Building Material & Garden Supplies Dealers

Internet, etc. Retailers

Electronics & Appliance Stores

Health & Personal Care Stores

Food Services & Drinking Places

Motor Vehicle & Parts Dealers

12-month % change

Sales Growth by Type of Business September 2013 v. September 2014*

Source: U.S. Census Bureau

*September 2014 advanced estimate

Conference Board Leading Economic Indicators IndexAugust 2007 through August 2014

Source: Conference Board

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%A

ug

-07

No

v-0

7

Feb

-08

May

-08

Au

g-0

8

No

v-0

8

Feb

-09

May

-09

Au

g-0

9

No

v-0

9

Feb

-10

May

-10

Au

g-1

0

No

v-10

Feb

-11

May

-11

Au

g-1

1

No

v-11

Feb

-12

May

-12

Au

g-1

2

No

v-12

Feb

-13

May

-13

Au

g-1

3

No

v-13

Feb

-14

May

-14

Au

g-1

4

On

e-m

on

th P

erc

en

t C

ha

ng

e

August 2014 = 103.8 where 2004=100

Coming to America (1988)

• Economy gained momentum over the course of last year;

• Tailwinds included booming stock market, lower gasoline prices, stabilizing global economy, and consumer expenditures on interest rate sensitive durable goods like housing and autos;

• The current year is associated with greater certainty regarding federal budgeting and monetary policy – that helps;

• The world is not perfect - black swan threats remain: (1) Iran (2) Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP;

• Healthcare reform could slow full-time hiring over the course of the year; and

• Regions with rapid population growth and/or significant import/export activity, industrial output and energy production will lead the way –Loudoun destined to be an outperformer, but near-term has been challenging.

Thank You

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