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Market Updates
Your resource for the latest thinking from our experts on the markets and economy in the coming year and beyond
Something Old and Something New
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Every recession is similar to and different from previous downturns, we see several factors emerging as foundation for a long-term advance for U.S. equities, and as a long-term bullish indicator, foreign demand for U.S. securities remains robust and supportive across multiple asset classes. |
What a Difference 100 Days Can Make For The Markets and Investors
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Major crises often lead to fundamental shifts in economic and social behavior, and we feel this time will be no different; there is potential for industrial stock performance to continue to improve, and the dollar may finally turn from a headwind for crude oil prices into a tailwind, in our view. |
In Claims We Trust
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Labor market data suggest the recession is already over, we see equities remaining in a higher trading channel owing to support by the A.B.Cs, and long-term exposure in many cutting-edge technologies and positions in their respective countries and companies seem to be leading the way. |
Conditions In Place For A Potentially Strong Global Expansion
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Global risk assets had been rallying hard, especially those more correlated with solid economic expansions; we expect to see a renewed focus on R&D by governments and businesses; and small caps are likely to be supported in the near term but still face headwinds. |
Moving Toward “Escape Velocity”
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Signs of a dramatic shift in the central banks' reflation efforts should raise the odds that inflation will finally increase to their targets, dynamics investors could have missed during pandemic headlines, and the Equity Risk Premium proves useful as it takes into account the level of interest rates. |
Going from “Wait and Watch” Stage to a “Path Forward” Stage
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This bear market may ultimately lead to a “Path Forward," the potential for new tensions to interrupt China's growth rebound and market recovery could cause emerging markets to lag further, and bottoming in the energy sector is considered a bright spot for markets. |
A Wake-Up Call
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Numerous factors suggest rising global public health risks, including pandemics; COVID-19's influence on the upcoming U.S. election and the U.S. fiscal policy programs enacted in response to the current pandemic are likely to limit the extent and duration of the current recession. |
Stopping Deflation
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This abundant liquidity combined with aggressive government spending could help support risk assets and the potential for a strong economic recovery; post the pandemic: debt, deglobalization, digitalization, demographics; higher muni yields may provide opportunities for investors. |
Macro Weakness vs. Market Rebound: Observations from Three Recent Crises
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Similarities with previous episodes suggest that investors should continue to look through the macro weakness; the ongoing pandemic will likely bring fundamental shifts in the global economy and behavioral changes among consumers and corporates; the new economy charges ahead. |
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All data, projections and opinions are as of the date of the report and subject to change.
This material was prepared by the Chief Investment Office (CIO) and is not a publication of BofA Global Research. The views expressed are those of the CIO only and are subject to change. This information should not be construed as investment advice. It is presented for information purposes only and is not intended to be either a specific offer by any Merrill or Bank of America entity to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
Global Wealth & Investment Management (GWIM) is a division of Bank of America Corporation. The Chief Investment Office, which provides investment strategies, due diligence, portfolio construction guidance and wealth management solutions for GWIM clients, is part of the Investment Solutions Group (ISG) of GWIM.
Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
All recommendations must be considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the best interest of all investors.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Bonds are subject to interest rate, inflation and credit risks. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.
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