MARKET INSIGHTS:NEW DEVELOPMENTS,WHAT TO CONSIDER, ANDTOP QUESTIONS ANSWERED

Our Speakers

HostJim ArmstrongMarketing Director, Fidelity InvestmentsJim Armstrong is a Marketing Director in Fidelity’s Personal Investing division. In this position, he creates educational content for workplace participants to help with retirement planning and other financial wellness topics. Formerly, Jim distinguished himself as an Emmy-winning journalist, spending 17 years as a television reporter for network affiliates around the country.

Special guest panelistsDenise ChisholmSector Strategist, Fidelity InvestmentsDenise Chisholm is a sector strategist in the Equity and High Income division at Fidelity Investments. In this role, Denise is responsible for the research of portfolio construction strategies combining sector-based mutual funds and exchange-traded funds (ETFs). Prior to assuming her current responsibilities in April 2013, Denise held multiple roles within Fidelity, including research analyst on the megacap research team, research analyst on the international team, and sector specialist.

Leanna Devinney, CFP®Vice President, Branch Leader, Fidelity InvestmentsLeanna Devinney is responsible for leading one of Fidelity’s Investor Centers. In this role, she offers our clients financial and investment guidance, including one-on-one retirement planning, wealth management, income strategies, and college planning services, as well as integrated employer benefit solutions.

A Short-Lived Recession

A Bounce in Retail Sales

Retail Sales and Food Services, Year-to-Year Percent Change

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Job Losses Slowing

Year-to-Year Percent Change in Payroll of Nonfarm Workers

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Past performance is no guarantee of future results. National Bureau of Economic Research defines a recession as a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Recessions as defined by NBER represent 10% of the periods studied. Using the monthly data from NBER shows the shortest recession as 7 months in July 1980. Grey bars represent recessions.Source: National Bureau of Economic Research, Haver Analytics, Fidelity Investments, as of May 31, 2020.

Business Cycle

The diagram above is a hypothetical illustration of the business cycle. There is not always a chronological, linear progression among the phases of the business cycle, and there have been cycles when the economy has skipped a phase or retraced an earlier one. Source: Fidelity Investments, Asset Allocation Research Team, as of 7/31/20.

After Recession Ends, Stocks Likely to Advance

Cyclical Stocks Have Led Post-RecessionStocks Have Gained following Recessions

Post-Recession Recoveries

Recession End Date Six-Month Return Recovery Market Return

Mar-1933 68% 178%

Jun-1938 14% 17%

Oct-1945 13% 2%

Oct-1949 13% 50%

May-1954 17% 64%

Apr-1958 18% 27%

Feb-1961 7% 53%

Nov-1970 14% 24%

Mar-1975 1% 29%

Jul-1980 6% 8%

Nov-1982 17% 155%

Mar-1991 3% 230%

Nov-2001 1% 30%

Jun-2009 21% 251%

Average 15% 80%

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Cyclicals Defensives

Past performance is no guarantee of future results. Analysis based on the top 3,000 stocks by market capitalization relative to the Russell 3000® Index. Cyclicals: technology, consumer discretionary, energy, financials, materials, industrials, and real estate. Defensives: health care, utilities, consumer staples, and communication services. The recovery market return is the period when a recession ends through the beginning of the next recession, as defined by National Bureau of Economic Research. Source: Haver Analytics, FactSet, Fidelity Investments, Cornerstone Macro, as of June 15, 2020.

Diversification Helped Limit Losses and Capture Gains through the Financial Crisis and Recovery

Source: Strategic Advisers, Inc. Hypothetical value of assets held in untaxed accounts of $100,000 in an all-cash portfolio; a diversified growth portfolio of 49% U.S. stocks, 21% international stocks, 25% bonds, and 5% short-term investments; and all-stock portfolio of 70% U.S. stocks and 30% international stocks. This chart’s hypothetical illustration uses historical monthly performance from January 2008 through February 2014 from Morningstar/Ibbotson Associates; stocks are represented by the S&P 500® and MSCI EAFE Indexes, bonds are represented by the Barclays U.S. Intermediate Government Treasury Bond Index, and short-term investments are represented by U.S. 30-day T-bills. Chart is for illustrative purposes only and is not indicative of any investment. Past performance is no guarantee of future results.

U.S. Stocks Recover February Highs

Past performance is no guarantee of future results.Source: Active Trader Pro, as of August 10, 2020.

Scorecard: Investors Continue to Emphasize Tech

Past performance is no guarantee of future results. Strategist View, fundamentals, and relative valuations are based on the top 3,000 U.S. stocks by market capitalization. Sectors defined by the Global Industry Classification Standard (GICS®); see disclosures for details. Performance metrics (including relative strength) are for S&P 500® sector indexes. * Changes were made to the GICS framework on Sep. 24, 2018. Communication services data from the top 3,000 U.S. stocks by market capitalization has been restated back to 1962 to account for the changes to the GICS. Strategist view is as of the date indicated based on the information available at that time, and may change based on market or other conditions. This is not necessarily the opinion of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information. Overweight and underweight views are opportunistic tilts in a hypothetical portfolio relative to broad market sector weights. Sector weights may vary depending on an individual’s risk tolerance and goals. Time horizon view factors are based on historical analysis and are not a qualitative assessment by any individual investment professional. Green suggests outperformance; red suggests underperformance; unshaded indicates no clear pattern vs. the broader market. See Methodology on disclosure slide. It is not possible to invest directly in an index. All indexes are unmanaged. Percentages may not total 100% due to rounding. Source: Haver Analytics, FactSet, Fidelity Investments, as of June 30, 2020.

Sector

Strategist View Longer Time Horizon View Shorter Performance as of 6/30/20

Weight in S&P 500®

Overweight NeutralUnderweight Fundamentals

Relative Valuations Relative Strength

LatestQuarter

Yearto Date Dividend Yield

Communication Services* ■ + 20.0% -0.3% 1.3% 10.8%

Consumer Discretionary ■ – + 32.9% 7.2% 1.2% 10.8%

Consumer Staples ■ 8.1% -5.7% 2.9% 7.0%

Energy ■ – + – 30.5% -35.3% 6.2% 2.8%

Financials ■ – + – 12.2% -23.6% 2.6% 10.1%

Health Care ■ + + 13.6% -0.8% 1.7% 14.6%

Industrials ■ – 17.0% -14.6% 2.1% 8.0%

Information Technology ■ + + 30.5% 15.0% 1.1% 27.5%

Materials ■ – – 26.0% -6.9% 2.1% 2.5%

Real Estate ■ + 13.2% -8.5% 3.3% 2.8%

Utilities ■ – 2.7% -11.1% 3.5% 3.1%

S&P 500®

Returns 20.5% -3.1% 1.9%

MARKET INSIGHTS:NEW DEVELOPMENTS,WHAT TO CONSIDER, ANDTOP QUESTIONS ANSWERED

Methodology

Fundamentals: Sector rankings are based on equally weighting the following four fundamental factors: EBITDA growth, earnings growth, ROE, and FCF margin. However, we evaluate the financials and real estate sectors only on earnings growth and ROE because of differences in their business models and accounting standards.

Relative Strength: Compares the strength of a sector versus the S&P 500 Index over a six-month period, with a one-month reversal on the latest month; identifying relative strength patterns can be a useful indicator for short-term sector performance.

Relative Valuations: Valuation metrics for each sector are relative to the S&P 500. Ratios compute the current relative valuation divided by the 10-year historical average relative valuation, eliminating the top 5% and bottom 5% values to reduce the effect of potential outliers. Sectors are then ranked by their weighted average ratios, weighted as follows: P/E: 37%; P/B: 21%; P/S: 21%; and FCF yield: 21%. However, the financials and real estate sectors are weighted as follows: P/E: 65% and P/B: 35%.

Strategist View: Our sector strategist, Denise Chisholm, tracks key indicators that have influenced the historical likelihood of outperformance of each sector. This historical probability analysis informs the Strategist Views.

Sectors are defined as follows: Communication Services: companies that facilitate communication or provide access to entertainment content and other information through various types of media. Consumer Discretionary: companies that provide goods and services that people want but don’t necessarily need, such as televisions, cars, and sporting goods; these businesses tend to be the most sensitive to economic cycles. Consumer Staples: companies that provide goods and services that people use on a daily basis, like food, household products, and personal-care products; these businesses tend to be less sensitive to economic cycles. Energy: companies whose businesses are dominated by either of the following activities: the construction or provision of oil rigs, drilling equipment, or other energy-related services and equipment, including seismic data collection; or the exploration, production, marketing, refining, and/or transportation of oil and gas products, coal, and consumable fuels. Financials: companies involved in activities such as banking, consumer finance, investment banking and brokerage, asset management, and insurance and investments. Health Care: companies in two main industry groups: health care equipment suppliers and manufacturers, and providers of health care services; and companies involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. Industrials: companies whose businesses manufacture and distribute capital goods, provide commercial services and supplies, or provide transportation services. Materials: companies that are engaged in a wide range of commodity-related manufacturing. Real Estate: companies in two main industry groups—real estate investment trusts (REITs), and real estate management and development companies. Technology: companies in technology software and services and technology hardware and equipment. Utilities: companies considered to be electric, gas, or water utilities, or companies that operate as independent producers and/or distributors of power.

Information provided in this document is for informational and educational purposes only.

Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the speakers and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

To the extent any investment information in this material is deemed to be a recommendation, it is not meant to be impartial investment advice or advice in a fiduciary capacity and is not intended to be used as a primary basis for you or your clients’ investment decisions. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in this material because they have a financial interest in them and receive compensation, directly or indirectly, in connection with the management, distribution, or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.

Investing involves risk, including risk of loss.

Past performance is no guarantee of future results.

Diversification does not ensure or guarantee against loss.

All indexes are unmanaged, and performance of the indexes includes reinvestment of dividends and interest income, unless otherwise noted. Indexes are not illustrative of any particular investment, and it is not possible to invest directly in an index.

The S&P 500® Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation. S&P and S&P 500 are registered service marks of Standard & Poor's Financial Services LLC. The CBOE Dow Jones Volatility Index is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. You cannot invest directly in an index.

Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.

Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market, or economic developments, all of which are magnified in emerging markets. These risks are particularly significant for investments that focus on a single country or region.

Indexes are unmanaged. It is not possible to invest directly in an index.

In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities). Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Lower-quality fixed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Foreign investments involve greater risks than U.S. investments, and can decline significantly in response to adverse issuer, political, regulatory, market, and economic risks. Any fixed-income security sold or redeemed prior to maturity may be subject to loss.

The CFP® certification is offered by the Certified Financial Planner Board of Standards Inc. (“CFP Board”). To obtain the CFP® certification, candidates must pass the comprehensive CFP® Certification examination, pass the

CFP® Board’s fitness standards for candidates and registrants, agree to abide by the CFP Board’s Code of Ethics and Professional Responsibility, and have at least three years of qualifying work experience, among other

requirements. The CFP Board owns the certification mark CFP® in the United States.

Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which

can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and

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summary prospectus containing this information. Read it carefully.

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MARKET INSIGHTS:NEW DEVELOPMENTS,WHAT TO CONSIDER, ANDTOP QUESTIONS ANSWERED