Global Research Unlocked

1. Yields should fall with a more dovish Fed but other levers needed to boost housing

10Y yields should fall if Fed more dovish than expectedLeading up to Powell's speech at Jackson Hole, the market has priced in a high likelihood of a 25bp cut at the September FOMC meeting. The prospect of rate cuts has helped to lift homebuilding stocks and the group is up 16% since the end of June. But the 10Y Treasury yield is more relevant for homebuyers taking out fixed-rate or even adjustable-rate mortgages. So a key question is how Fed cuts, which should come--it's just a question of when

Aug 26,2025 25:30

2. Give me value or give me vibes: segments of restaurant industry still special

Coffee away from home enjoying demographic tailwindRestaurants have faced some of the same sales challenges experienced elsewhere in the economy as chains more reliant on lower income consumers have felt more pressure than those with a higher income skew. Sara Senatore discusses the opportunity that inflation and a more selective consumer have created for fast casual and even casual dining. But dining preference shifts mean that fast casual tailwinds extend beyond price gaps. Sara talks about wh

Aug 26,2025 20:32

3. Big beautiful sales beats should accelerate profit growth

Rev beats bode well but may not lead to big index gainsThe percentage of companies beating on earnings and revenues this season is higher than average and the percentage beating on sales is the highest in four years. Tariffs may be playing a role in the sales beats but either way, the better than expected revenues suggest companies are able to raise prices, a positive sign for corporate resilience. Coupled with softer labor markets and AI, the prospects for operating leverage are strong. And whi

Aug 15,2025 21:41

4. US dollar slide sustains the Emerging Markets ride

Could be in the early stages of a re-weighting into EMEmerging Market (EM) equities have outperformed the S&P 500 so far this year. The weaker US dollar has furnished a number of positives for EM assets, from cheaper funding to less imported inflation to a more attractive carry trade. David Hauner discusses the various positives ahead, including superior economic growth, central bank cutting cycles and the possibility of a lengthy dollar decline. David also discusses EM credit which has seen buy

Jul 28,2025 23:44

5. NATO, Golden Dome among the positive thrusts for US defense

Several positives for US defense but FY26 a tough compDefense spending growth in the US and Europe is accelerating. The shift is particularly acute in Europe, where NATO allies had been spending between 1.5% to 2% of GDP on defense equipment but agreed in late June to spend 3.5% by 2035 (5% including other national security spend). Stocks of the European defense contractors have performed well this year as the market begins to anticipate this stronger spend and Ron Epstein addresses to what degr

Jul 25,2025 20:18

6. Steady Fed, rising inflation, limited catalysts for market upside

Limited near-term catalysts for market upsideThe US Equity Strategy team recently raised its S&P 500 target but the target implies little to no upside between now and year-end as the team sees few positive catalysts over the next several quarters. Fiscal impulse from the One Big Beautiful Bill will be positive but lower than originally expected. The US Economics team expects the new fiscal plan to add between 0.3% and 0.4% to GDP growth in 2026 and to fade thereafter as benefits are front-loaded

Jul 24,2025 21:37

7. A pipeline of growth for midstream

Pipelines boom, esp. in the previously quiet Northeast There's been a marked increase in the number of natural gas pipelines expected to be in service in the next several years. President Trump's policies explain some of this. But the commercial side is also enabling the boom. Jean Ann Salisbury addresses the various drivers and how these new pipelines could mean several hundred basis points of additional growth for some midstream companies. Interestingly, much of this development is taking plac

Jul 11,2025 15:52

8. Dig it - nuclear renaissance looks to the ‘60s for inspiration

Thorium can power long-term growth nuclear generationNuclear energy has received a lot of investor focus, especially following the President's recent executive orders and numerous agreements to supply nuclear power to data centers. But while adding capacity to existing plants isn't a major challenge, adding new US plants is more difficult. Jess Gehin from the Idaho National Lab and BofA Global Research's US Utility analyst Ross Fowler join to discuss what may lie ahead. Jess covers how the recen

Jul 01,2025 21:21

9. Stablecoins; not your brothers’ digital asset

Stablecoins offer opportunities and pose risksPotential for increased adoption of stablecoins and implications for the banking sector has become a hot topic among investors given the push among policymakers. Eventually, consumers might be able to buy dollar-linked stablecoins and potentially earn interest on these assets, meaning more competition for bank deposits. There are regulatory hurdles that first need to be cleared but Congress is currently considering a few proposals that could bring th

Jun 10,2025 19:42

10. Stimulative aspect of fiscal plan could be at least partially offset by rates

Long end of Tsy curve faces supply/demand imbalanceAs tariff fears have moved to the background, a different economic concern has moved to the foreground-growing fiscal deficits and the impact on interest rates. Public debt-to-GDP stood at 98% last year and is set to rise further. We discuss why deficits have captured the market's attention today and whether growth aspects of the budget plan could be offset by the higher interest rates. While the boost to growth isn't large, certain groups shoul

Jun 04,2025 19:44

11. Next big smart device could be right in front of your eyes

Smart glasses may weigh on phone sales, lift Internet useSmart glasses could be the next big opportunity in personal technology. Leading tech companies are focused on the form factor and functionality like augmented reality and 4K video may follow today's applications, which include AI assistants, music playback, phone calls and hands-free texting. Ultimately, these devices could stretch out the smart phone replacement cycle, like phones have managed to stretch the replacement cycle for laptops.

May 23,2025 15:50

12. Sentiment is sour, but structural reasons to expect USD weakness to continue

USD overweight exposure is now normalizingEven as equities have rallied substantially from April lows, recovery in the dollar index, or DXY, has underwhelmed and the currency sits near the lowest level it's been in three years. Alex Cohen believes that while there are cyclical reasons for the dollar weakness, there's also been a bigger structural rethink on the currency by investors from the push toward de-globalization and from questions around US exceptionalism. Alex sees German fiscal reforms

May 14,2025 19:23

13. Medtech transfer pricing, a device for lower tax but higher tariffs

Looming tariffs lead to renewed focus on transfer pricingMultinational companies have used transfer pricing as a way to reduce tax bills. Transferring a product from a lower tax jurisdiction allows profits to be taxed at the lower corporate rate, so a higher price can mean greater tax savings. But tariffs would be based on the higher price, meaning that some of the same companies using this practice to lower tax bills will also face higher levies. Travis Steed discusses what this means for medte

May 01,2025 19:20

14. Junk food nation increasingly lifting “workout” shakes

Budget conscious consumers indulge in healthier foodsThere's been a shift in snacking towards healthier options and away from some of the convenience store classics. A stretched consumer seeking value for their dollar seems to be allocating spend to cleaner alternatives. These often contain more protein and less of what's perceived as harmful. Rising GLP-1 (glucagon-like peptide-1) usage may be a minor contributor to these shifts too, though it's likely that more of this impact is ahead of us as

Apr 08,2025 21:14

15. Europe answers on defense spending, leading to questions on US impact

Euro defense spend benefits US contractors near-termEuropean plans to spend more on defense as a percentage of GDP were hatched in the immediate aftermath of the Ukraine invasion. More recently, the German Parliament agreed to reforms that allow for even more spending on defense. But for a number of reasons, Europe would like to keep more of this spending within the Euro Area. Ron Epstein and Ben Heelan discuss what Europe may be able to procure internally and what they'll be buying from US cont

Apr 08,2025 17:12

16. Tech-forward Dubai a compelling backdrop for discussions on AI, Blockchain

Dubai is embracing tech, should investors embrace AI?Our Global Investment Summit in Dubai offered attendees some perspective on what Dubai and the UAE are doing to advance AI. Panels also offered a look at how the technology is being used beyond the borders of the UAE and threats it brings. Sonali Thiesen, Global Head of FICC e-Trading and Markets Strategic Investments and Haim Israel were panelists at the Summit. Haim discusses the critical role that cybersecurity will play as AI evolves. He s

Mar 31,2025 21:26

17. Global Takes from the Investor Summit in Dubai

An interesting time to explore other shoresWe recently hosted a two-day Global Investor Summit in Dubai. Panels as well as formal and informal discussions touched on everything from the investment merits of Dubai and the Gulf Cooperation Council (GCC) to US policy to evolving views on non-US markets. Michael Hartnett discusses his latest views on international markets and how investors are reacting to uninspired price action from US stocks. With so many investors coming in to 2025 with a US exce

Mar 20,2025 18:51

18. Improving small biz could be good news for software but bugs lurk

Improved SMB macro positive for software but risks existSmall businesses have faced challenges, from higher costs to difficult hiring to higher rates and mixed demand. The Bank of America Institute examines the bank's proprietary data to better understand the US economy. Based on data through February, the Institute found that for the first time in three years, deposit growth among small clients surpassed balance growth, a sign of improved profitability. Taylor Bowley from the Institute discusse

Mar 19,2025 23:19

19. Alternatives to US markets EMerge strong out of the ’25 gate

Tariff fears, years of US optimism create opening for EMDavid Hauner has been bullish on emerging markets since the US Presidential inauguration, and that view has gotten more attention with performance of markets so far this year. Investors have been seeking out markets outside of the US and recent US policy uncertainty is one of the many factors causing this shift. David points to improvements in China and Europe, the inability for the dollar to rally further, off-sides positioning in EM, espe

Mar 12,2025 20:44

20. A Ukraine ceasefire would lead to a pipeline of commodity opportunities

Reconstruction should boost demand for certain metalsAn end to the Russia-Ukraine conflict would have an impact beyond the most important, which is ending the bloodshed. Russian natural gas could start to flow through Ukraine and into Europe once again, pushing Europe gas prices significantly lower, positively impacting European industry and dampening inflation. Oil supplies would be impacted as well and Francisco Blanch discusses how OPEC might react to in case Russia increases oil flows to the

Feb 27,2025 25:45

21. Investors so enamored with the US may want to find another Valentine

Yes, there is a compelling case for stocks outside the USInvestors have record exposure to US stocks according to the latest Global Fund Manager Survey. The US dollar, in real effective terms, is at all-time highs by some measures. Several of our strategists believe international equities can begin to outperform and that the US dollar could peak. US policy could help, and the Global Investment Strategy team expects a softening of America First policy and reigned-in US inflation to be supportive

Feb 13,2025 25:44

22. US growth to remain strong in 2025, other economies can positively surprise too

Productivity consistent with higher for longer ratesThe Global Economics Team is optimistic on US growth in 2025 and Aditya Bhave discusses the cyclical and structural forces supporting this outlook. The US disinflation story has stalled for now and the team expects inflation to end in 2025 at around the same levels where it finished 2024. That view incorporates some impact from new tariffs but we discuss why the tariff impact on personal consumption expenditure inflation (PCE) should be just a

Jan 22,2025 25:53

23. The sun hasn’t set on renewables

Federal subsidies not the only factor enabling solarThere is investor concern that federal subsidies for some renewable energy programs, from residential solar to utility wind, will shrink under the Trump administration. And those concerns have some validity, but according to Dimple Gosai, even with a possible decline in federal help, there are a number of positives that should persist for parts of the clean energy industry. Among the positives are state and local subsidies as well as system cos

Dec 19,2024 15:04

24. Programmatic ad spend continues to find new plot lines, characters

Disruption of linear TV a boon for programmatic Connected TV, or CTV, which refers to everything from movies watched via apps on television to apps offering live TV and traditional DVR capabilities via the Internet, has seen a surge in share of ad spend. This is especially true as more of this connected programming is offered via ad-supported tiers. Programmatic can also bring in more advertisers by making it easier for small and medium sized businesses to buy ad space. AI can drive growth too,

Dec 05,2024 16:03

25. Interest rate path is a winding two-way street

Not all forces are aligned to push rates higherThough the possibility of tariffs and immigration reform, in combination with pro-growth policies, would seem to bias interest rates higher, the 10Y yield is up fairly modestly since election results were announced. And while Mark Cabana expects the 10Y yield to trade in a higher range than it did previously, Mark and the team don't expect 10Y yields to run to 5% and beyond. Mark joins us to discuss the forces that could push rates higher and those

Nov 20,2024 24:35

26. Change in inflation trend has central banks buying gold, households could be next

Strong backdrop for gold but sharp rally suggests a pauseGold has had an incredible rally this year, appreciating more than the S&P 500 or NASDAQ. Global central banks have bought at the fastest pace in history, and making gold the second largest reserve asset behind the US dollar. Jared Woodard believes there may be a buyable dip in the months to come and explains why. As for gold equities, they have materially outperformed the gold price of late and Lawson Winder says the time to own gold mine

Nov 19,2024 18:51

27. High yield boom can get loud with election clarity but rates must cooperate

HY issuance recovers but net new credit largely absentSpreads in the US high yield market are near the tightest levels ever, providing a constructive read on the US economy. Tight spreads and lower rates have led to a pickup in HY issuance, which recently approached more normal levels, but that has since slowed as rates moved up. And much of the issuance seen has been used for refinancing. The positive is that there could be another leg for issuance as companies sell debt to finance capex or acq

Oct 30,2024 22:27

28. Rising insurance prices becoming as dependable as active storm seasons

Insurance costs should continue to rise in high risk areasInsurance is in the news again following two damaging storms. Sadly, for many homeowners, much of the damage won't likely be covered by insurance given that it's flood-related and nationally, only about 4% of homeowners have flood coverage. Some homeowners will choose to add flood, adding to the cost of homeownership, but especially in Florida, there was wind damage too. This damage was inflicted on a FL insurance market where 15-20% of p

Oct 30,2024 23:28

29. Japan conference reinforces view there’s another leg higher for markets

Corporate transformation, AI could drive Japan equitiesLast month, BofA Global Research hosted its annual Japan conference. Over 500 investors joined, and attendance was up 2% versus the prior year. Japan equities rallied sharply through July, but then a rate hike from the BoJ and a stronger Yen disrupted the upward momentum. Daisuke Takato suggests there was more evidence of positive change at the conference. He reiterates Japan Equity Strategist Masashi Akutsu view that 2025 will be another le

Oct 29,2024 17:24

30. The persistent pursuit of megawatts; meeting today’s energy demand

Demanding investment in the grid and generationUS electricity demand growth in 2024 has run at a faster pace than GDP. This follows a decade in which demand hardly grew. And while data centers are an important driver of this recent growth, there are other, more important factors, namely building electrification. Reshoring and electric vehicles have also been a boost. The point is that the factors behind this growth are many, meaning that a slowdown in one area isn't likely to derail what should

Oct 16,2024 20:59

31. Pleasant views from the Global Real Estate conference

A ready-mix of positives for real estateLast month, BofA hosted its annual Global Real Estate conference with record client attendance. Jeff Spector suggests that while investors have been underweight real estate the last couple of years as rates rose, recent outperformance is beginning to draw investors into the group. The fall in rates make REIT yields look more attractive, all else equal, and also come with a number of fundamental positives which we discuss within. REIT executives at the conf

Oct 07,2024 25:28

32. Rate cuts are underway but home buyers await more

Lower rates will drive home turnover and housing stocksMortgage rates have dropped by more than 100bps since last fall and housing stocks have responded. But while lower rates should in theory be good for demand, signs of improvement are modest so far. Many buyers remain on the sidelines as they await a further drop in rates. On the supply side, the new rate regime should reduce lock-in and allow more existing homes to come to market. This might seem to balance the increased demand, but Rafe Jad

Oct 04,2024 19:49

33. Rate cuts to boost some construction segments with a lag

Construction spend strong on structural tailwindsConstruction spending, excluding housing, is running at a rate of about $1-$1.2 billion annually, near record levels. Much of this spend is driven by recently passed legislative acts, according to Mike Feniger. But reshoring and AI are also having significant positive impact and the annualized capex for big tech has increased from $138 billion to $229 billion in just a year. Still, despite the headline strength, there are areas of construction whi

Sep 13,2024 17:36

34. The AI evolution could become a revolution

GenAI: Coming Soon to a Sector Near YouAlkesh Shah views Generative AI (GenAI) as the beginning of the third major tech cycle of the past 50 years. Over the past 10 years, development of more powerful chips and a new neural network architecture has raised the upper bounds of storage and computation exponentially, consequently reducing the time and cost to train increasingly large models powering apps like ChatGPT. Alkesh expects GenAI to catalyze a revolution in corporate efficiency and producti

Sep 04,2024 15:47

35. Normalizing consumption keeping inflation civil

Labor market remains key to consumptionDiscretionary services grew unusually quickly as the economy reopened and savings buffers were high. In 2023, spending received another boost in the form of the Social Security cost of living adjustment, which contributed to rapid 4% GDP growth in the second half of the year. But now, things are slowing to a more normal, trend-like pace of 2%. And there's evidence to suggest that after outsized strength, spend on travel and other services is easing too. One

Aug 29,2024 19:22

36. Powerful demand for electricity meets towering supply

A weakening relationship between nat gas and tempsIn the US, natural gas has struggled for nearly two years to cope with a storage surplus. Meanwhile, solar power generation has jumped to new highs. These are among the reasons that natural gas prices have languished despite growth in US electricity demand. And growth in solar capacity has weakened the formerly positive relationship between summer temps and gas prices. Francisco Blanch believes US power demand growth should continue into 2030, dr

Aug 14,2024 21:47

37. Bucket list checked, consumers back to viewing travel as discretionary

Value in Vegas has kept consumer demand resilientThe number of people traveling by air in the US continues to make records, but some airlines have posted disappointing results. That's because pricing has been weak as airline capacity has grown faster than demand. Andrew Didora does expect that airline capacity growth will slow after the summer, easing these pressures. But while demand for airline seats continues to make new highs, there are a number of areas that are undergoing normalization, es

Aug 02,2024 22:42

38. What did we learn from our Media in Montauk Conference?

Slam dunk for streaming media in acquiring NBA rightsEarlier this month, Head of US Media and Entertainment Research Jessica Reif Ehrlich hosted her annual Media in Montauk conference. As is typical, discussions at the conference were most focused on long-term trends and strategy. Women's sports got a lot of focus, especially as the WNBA has seen rising ratings and interest. Year-round offerings are particularly important for streaming networks looking to combat churn and the scheduling of the W

Jun 28,2024 15:44

39. Cooling but not cool; US labor market remains robust but is normalizing

Job gains will slow but healthcare has room to runThe labor market has remained robust, adding an average of about 250k jobs monthly since the start of the year. But services jobs account for the bulk of the recent growth and at this point, demand in many parts of the service economy have fully recovered. Additionally, structural changes and shifts toward automation accelerated amidst the difficult hiring backdrop. Michael Gapen addresses questions about how much growth is left in services jobs,

Jun 26,2024 17:55

40. As prices rise, consumers dig into leftovers, putting volumes in a deep freeze

Volume picture better for restaurants than packaged foodFood companies are seeing negative volumes, both in their grocery businesses and their food service businesses. The volume picture looks a bit better for the largest restaurants but it's also sluggish. Consumers seem to be economizing more than they were a year or two ago, one way is by eating more leftovers, or eating breakfast at home, and that poses some important questions for these industries as they seek to improve volume growth. But

Jun 24,2024 21:11

41. Making sense of historic yen weakness, and its implications for the economy

A weaker yen can boost exports and tourism profitsThe Japanese Yen hasn't been at these levels vs the US dollar since the late 1980s. There are two key drivers of this Yen weakness. One is the interest rate spread. The second, and probably more important longer term, is structural outflows from Japan and the biggest component of this is outward FDI (foreign direct investment) activity by Japanese corporates. The weak yen has mixed effects, boosting export competitiveness and helping tourism reve

Jun 05,2024 19:37

42. A magical intermission; entertainment spending growth normalizes

What's old is new again: bundling streaming servicesEntertainment and theme park spending growth has been weaker as demand normalizes from the post-reopening surge. But despite difficult comps, domestic attendance for key parks is flat to up with small and new attractions as a key driver. Indeed, we will get an important major new attraction in Orlando next year. In streaming, viewers can expect to see more personalized ads and ads that allow for more direct purchasing. Combined with election sp

Jun 04,2024 16:54

43. Even as the cycle extends, some credit metrics improve

Buy now pay later slowing but still disruptingRising card delinquency rates, particularly among lower income consumers, are one of several pieces of data that have led some to take a negative view of the US consumer. But Mihir suggests delinquency rates have started to decline recently and discusses why that's been the case. Ultimately, employment is a key driver for consumer credit and we'd be more concerned if the outlook for jobs deteriorated more rapidly. "Buy Now/Pay Later" or BNPL has enjo

May 23,2024 21:16

44. Slow growth and Fed cuts help build a good case for bank stocks

A slow but steady hand on the cut buttonThe eventual impact of higher rates on credit, the rise of private capital, slow loan growth and forthcoming tighter regulations have all weighed on bank multiples to varying degrees. But these attractive multiples relative to history, combined with a view that rates probably have peaked, keep Ebrahim Poonawala constructive on the bank group. This is particularly true for money center banks and large regionals, which are less impacted by regulatory changes

May 21,2024 16:48

45. Copper and uranium demand boosted by a multitude of investment themes

Strong demand and difficult supplyOver the last two decades, copper demand was inexorably linked to China. At times, China accounted for 110% of global copper demand growth. Now, countries are rebuilding their supply chains at home, building data centers and decarbonizing. While the source of copper demand has changed, demand growth remains compelling and strategist Michael Widmer is bullish on the metal while analyst Lawson Winder is constructive on exposed stocks, even as EV sales slow. On the

May 13,2024 23:48

46. Millennial housing bid continues, but shifting to more affordable cities

Millennial home buying continues but in some new placesNew home sales are down only marginally from 2021 levels despite mortgage rates rising roughly 300bps over that period. Demand from Millennials entering peak home buying age, wealthy boomers and domestic migration have helped to offset affordability challenges created by higher rates. Existing home sales, however, have slowed to the lowest levels in roughly 30 years as homeowners are "locked-in" at low mortgage rates. A decline in rates woul

May 13,2024 17:24

47. Inflation, technology and shifting realities for broadline/hardline retail

Big portion of retailers hoping for lower ratesHome improvement retail has been challenged by a number of factors of late, from pandemic pull-forward to weakness in existing home sales to inflation that's crowding out other spending. Lower rates would help and millennial home buying continues to provide some support for sales. Robby discusses the role home improvement stocks could play in the housing affordability challenges we face. Shifting to other areas in Robby's coverage, general merchandi

May 06,2024 16:24

48. Software’s AI Opportunity Is Still Ahead

AI: Hardware Today, Software TomorrowCorporate investments in AI have had significant impact on the financials of certain semiconductor and server companies, but while software providers stand to benefit from AI investments too, the technology hasn't yet shown up in the profits of these companies in a meaningful way. Alkesh Shah draws parallels between AI today and the Internet in 1995. Back then, investments were mainly in equipment and chips and the successful Internet companies that we know t

Apr 23,2024 14:23

49. Pandemic debt maturities, higher rates make for busy convertible bond issuance

Higher rates broadening the converts issuance marketConvertible bonds (CBs) can offer equity-like returns with downside protection thanks to the coupon and the ability to redeem most CBs at par. Thus far in 2024, CB issuance has been active, well ahead of levels seen the last few years. Michael discusses the reasons for such an active issuance year, including that Pandemic debt issuance, which was at record levels in the convert space, is starting to come due and converts offer issuers the abili

Apr 23,2024 16:03

50. S&P earnings growth to bloom and broaden in 2024

Earnings improvement is still fairly nascentIn 2023, we saw an earnings recession, at least in the first half of the year, despite GDP growth that was ahead of trend. Back then, companies were adapting to higher rates, weaker demand and climbing costs, which weighed on earnings. Ohsung Kwon expects earnings growth to look much better in 2024. This year benefits from a lower 2023 earnings base on which to build as well as a number of positives, including rising margins through more rational costs

Apr 11,2024 18:10

51. Sticky inflation and strong labor market don’t imply acceleration of US economy

Data trends are approaching Fed threshold for rate cutsThe latest economic data releases this year suggest the labor market remains strong but is cooling and the consumer is resilient in the face of sticky inflation, especially on the services side of the economy. Michael Gapen says the rebound in the labor force, labor participation and net migration played a crucial role in his revised US GDP (gross domestic product) estimates where he forecasts higher economic growth in 2024 and lower growth

Apr 03,2024 17:05

52. Wheels make the economy go ‘round; transports and the case for rails

Transports would ride the cycle but modes matterTransport metrics had been in an extended downturn for around 18 months. Demand was depressed, inventory levels were high and end demand for goods had faded from COVID highs. But more recently there are signs of stabilization in some of the data tracked by BofA Global Research, partly because trucking supply has been removed. And some purchasing managers indices, or PMIs, have shown modest improvement. Ken Hoexter discusses what this improvement me

Apr 03,2024 22:12

53. Geopolitical calm would help, until then Europe tied to cyclical shifts

A number of things can go right for Europe Earlier this month, BofA Securities hosted a Global Investor Summit in Rome, Italy. In attendance were corporate executives, prominent investors, policy experts, members of BofA management and several BofA Global Research strategists. Topics ranged from private capital to understanding central banks to the future of Europe. Michael Hartnett suggests that while European markets have been doing well, you often hear a less bullish view of the world in the

Mar 27,2024 07:09

54. Rate hikes mostly kept these markets from emerging, but shifting cycle helps EM

Global growth matters for Emerging MarketsAt the start of the year, markets were pricing in three rate cuts by June and now, the likelihood of one cut by June is close to 50/50 based on market implied probabilities. But while delayed rate cuts complicate the bull case for Emerging Markets (EM), David Hauner does point out that expectations for cuts have slid partly because of stronger economies, a positive for EM. Still, further delays in rate cuts would likely be a short-term negative for EM a

Mar 20,2024 20:23

55. ESG is evolving, but not going away; new EU rules to have broad impact

ESG topics still impacting stocks and there's more to comeUS ESG funds faced a challenging 2023, seeing net outflows of around $7.1 billion, but strong markets meant that assets under management grew strongly. In the US, ESG regulations have historically been market driven, unlike the specific directives in the EU, but more recently the regulatory landscape in the US has seen a flurry of initiatives. For investors, there is state legislation that seeks to penalize managers who boycott fossil fue

Mar 18,2024 23:23

56. Slowing the shrink; the impact and impetus behind a QT moderation

Rate policy isn't the only big Fed change likely for '24Since emerging from the COVID pandemic, the Fed has contracted the size of its balance sheet, also known as Quantitative Tightening (QT). They've done this by allowing their Treasury holdings to mature without reinvesting the proceeds. This has placed upward pressure on yields, all else equal. But the Fed is expected to slow this process later this year. Mark Cabana says this is good news for the Treasury market as it means the private sect

Feb 26,2024 22:08

57. Global Wave inflects, that often means swell outcomes for EM, cyclicals, equities

Global Wave should start to buoy Emerging MarketsThe Global Quant Strategy team's macro indicator, the Global Wave, has inflected and is now rising. This positive signal follows the longest downturn on record (25 months). And while US markets have been rallying for over a year, US outperformance during Global Wave downturns is typical. History shows that in the year after previous Wave troughs, global equities rallied and emerging markets modestly outperformed the US. Consistent with this improv

Feb 26,2024 16:50

58. Merger Monday not yet ready to take over but expect M&A headlines in certain areas

M&A activity should increase but not everywhereM&A (Mergers & Acquisition) activity had fallen to well-below the 10Y average over the last 2 years. There are various reasons for this slowdown, including higher rates and negative corporate sentiment. But between equity markets faring well over the last year and interest rates off highs, there are some reasons to expect a recovery. Indeed, we've seen a bit of an uptick. We speak with Jill Hall who points out that SMID cap valuations are inexpensiv

Feb 12,2024 19:18

59. Upward sloping natural gas price curve means gas equities likely to climb higher

The dynamics of the US gas market about to changeUS oil production grew roughly 1mm barrels per day in 2023 and while US production growth may be slowing, it's growing elsewhere including in Guyana and Brazil. Such growth outside of Saudi threatens their market share, and that could mean even more supply as Saudi looks to take that share back. That all makes for a tough backdrop for the oil price and oil-levered equities, but the situation is more positive for equities levered to US gas. Signifi

Jan 30,2024 26:18

60. Next episode of the growth narrative for streaming video companies

Bundling, targeted ads among streaming growth drivers Streaming video choices have ballooned over the last decade and leading streamers are already reaching well over half of US households. But there are still a number of compelling growth drivers. The crackdown on password sharing is underway and can boost subscribers, so can bunding deals, such as those with wireless companies and there's still room for much better ad targeting. Meanwhile, streaming companies are slowing their investment in co

Jan 12,2024 18:01

61. Our Outlook for 2024: Breadth in Rate Cuts and Markets

Investors face a much different backdrop in 2024Our Economics and Strategy teams expect central banks in developed economies to start cutting rates in '24, inflation to slow further and the dollar to weaken. But questions persist, ranging from which emerging economies may perform best amidst the weakening dollar backdrop, whether 10Y Treasury rates will follow Fed Funds rates lower, and if the markets might be too complacent about inflation and growth. Members of our Economics and Strategy teams

Jan 03,2024 38:27

62. Water – An expensive problem with cheap solutions

Desert island album? How about fresh water.Less than 1% of the world's water supply is usable and the demand for water is growing faster than the population, creating a scarcity issue for the world's most important resource. AI requires a substantial amount of processing power and that means more water is needed to cool servers in data centers. In fact, one liter of water is consumed for every 40 ChatGPT commands processed. But, the good news is that there are relatively cost effective solutions

Dec 19,2023 23:40

63. Interrupting the cycle of high rates and higher deficits

Heavy supply likely limits the downside in 10Y yieldsTreasury bond yields are off recent highs but still up 40bps+ YTD and at the highest levels in 15 years. This is despite a decline in the inflation rate and an expectation from our Economics team that disinflation will continue. But bond yields are high not just because inflation is higher than recent trend, they're also high because of higher bond supply and less demand. Megan Swiber from Rates Strategy discusses the $8T of Treasuries that wi

Dec 06,2023 17:59

64. A real boost to operating margins through artificial intelligence

Many businesses to see AI benefits within medium termThe democratization of artificial intelligence or AI has created a major tech wave for consumers. AI promises to make some businesses more efficient and even help businesses generate more revenue. We surveyed BofA Global Research analysts across the globe and found that 94% of covered companies plan to use AI to become more efficient and generate revenue. Survey participants expect 75% of companies to see positive AI benefits within the next 3

Nov 24,2023 24:31

65. The Bull Case for US Stocks

Productivity gains from AI will drive margin growthThe S&P 500 has enjoyed double digit gains this year thanks in part to waning recession concerns and a resilient consumer that has been somewhat insulated from higher interest rates. We sit down with Head of US Equity and Quantitative Strategy, Savita Subramanian, who remains bullish on US equities from these levels. Savita believes that in this backdrop of high inflation, wage growth and interest rates, companies will likely focus more on effic

Nov 10,2023 13:21

66. GLP-1s may save healthcare billions but could cost companies growth and revenues

GLP-1 impact should be big but lots of puts and takesAlmost 40% of US adults are obese and the US healthcare system spends nearly $173 billion a year on obesity-related medical costs. In the past, exercise and diet regiments were the best solutions for combating obesity but now there's an injectable called a GLP-1. These drugs trigger receptors in the brain to suppress appetites, cravings and addictive behaviors. Pete Galbo explains GLP-1s could mean less snacking but even years from now when pe

Nov 10,2023 21:47

67. The time to own Emerging Markets is not now, but it may be near

The EM growth story should unfold in the springOil prices have rallied over the last few months and while Francisco Blanch has crude oil forecasts above the commodity curve for 2024, the curve is downward sloping as demand growth is expected to be weaker and supply stronger. With Emerging Markets (EM) now negatively correlated with oil prices, lower oil could be a relief-China and India are now the biggest importers of oil in the world. David Hauner adds that 80% of EM returns tend to come when

Oct 27,2023 24:27

68. Future of EV charging depends on whether it’s done at the gym or beside I-95

Future of charging depends on complicated questionsElectric vehicles (EVs) are expected to account for 35% of new vehicle sales in North America by the end of this decade. This means more EV charging stations will be needed, but the mix between expensive fast chargers, like those seen at highway rest areas, and cheaper slow chargers is debated. Especially as most trips are short and easily within vehicle range. Alex Vrabel joins us to discuss how public why auto OEMs have recently coalesced arou

Oct 11,2023 20:33

69. Deleting the middle seat through aviation technology

Narrowbody aircrafts will usher in a new era of aviationThe commercial aircraft market offers fairly steady and attractive growth. About 2-3% of the fleet gets replaced every year and on top of that, the fleet is likely to keep expanding, as air traffic is expected to grow at about 1.5x-1.7x the rate of Global GDP. Within the commercial market, narrowbody aircraft, which traditionally have just one aisle, have been gaining share as fuel efficiency has improved range and because these planes can

Oct 04,2023 19:13

70. Inflation means shopping around for gasoline and hedges

Sticky inflation means the Fed put slips awayVolatility markets in rates and equities are sending different signals. Equity volatility has fallen back to pre-COVID levels while rate volatility is still elevated. Ben Bowler suggests that despite lots of uncertainty in rate markets, equity investors are still conditioned to "buy the dip." But high inflation means that the free Fed backstop is no longer and tail risks are greater. The low level of implied equity volatility means that there's an alt

Sep 21,2023 26:15

71. Welcoming inflation back to Japan

Inflation is positive for Japan and BoJ wants it to sustainJapan's economy has been stuck in a negative feedback loop of low growth, low inflation and interest rates since the asset bubble burst in the late 1980s. An environment of little to no inflation reduced the desire to raise wages, to invest and to spend. But the return of inflation can mean corporate investments in productivity, in growth and a consumer desire to spend. As the purchasing power of cash erodes, investors could reallocate i

Sep 14,2023 26:53

72. Lithium supply charges ahead, outpacing torque-y demand

Lithium price likely to fall and take battery costs down tooLithium is one of the more abundant minerals found in the Earth's crust and relative to other metals markets, like copper, it's still fairly small in size, which helps to explain the volatility. Even though global EV (electric vehicle) penetration is expected to rise to 40% by the end of the decade, Matt DeYoe sees an oversupply of lithium in 2024 and 2025, pressuring prices for the metal and providing cost relief for battery suppliers

Aug 23,2023 27:07

73. Prepare for landing — Sky high international travel demand to normalize

You can't fly to Ithaca when you're in ItalyUS network airlines have benefited from booming demand for international travel this summer. Revenues for US to Europe routes are 45% higher than pre-pandemic, helped by pent up demand and a lifting of all restrictions. Domestic beach and mountain destinations were great options in 2021 but have lost share as people set their sights abroad. But Andrew Didora believes we should see some normalization this Fall as people who had traveled internationally

Aug 14,2023 19:58

74. End of easy money means beginning of productivity improvements

AI to drive productivity and margin expansion over timeCompanies have faced rising cost pressures as they emerged from the short-lived COVID downturn. The price of raw materials, labor and money has all risen but there are positives that come with this changing dynamic-companies are forced to focus on efficiency. Savita Subramanian believes we are at the forefront of a productivity boom driven partly by AI but also corporate necessity. Savita points out that the pace of margin deterioration has

Aug 04,2023 21:00

75. Yield curve discounting a fall in prices not the economy

Bond market expects the Fed to get the job doneDespite all the talk of sticky, structurally higher inflation, Meghan Swiber and the US Rates Strategy team find that after disaggregating the yield curve the message from rates markets may be a bit different than the popular discourse. Yes, the yield curve inversion suggests the market is pricing in Fed rate cuts. But looking at implied real rates suggests these cuts are expected because inflation should come down to the Fed's target, not because o

Jul 17,2023 13:53

76. Blistering heat but cooling rents in the Sunbelt

Demand for new homes and single-family rentals should remain strong even in a mild recessionRental markets saw booming demand as people migrated and the economy recovered from COVID lows. But now, certain markets are facing high apartment supply, recent rent increases have made apartments less affordable and the consumer is less flush. Josh Dennerlein discusses apartment risks in the Sunbelt, why the single family rental market is generally more attractive than multi-family and why New York City

Jul 12,2023 25:45

77. Thoughts on Digital Assets: Beyond Crypto

Tokenization of traditional assets acceleratesToken prices have gone up, down and up again, but the development of distributed ledgers and blockchains has accelerated throughout the volatility. The technology is maturing as public permissionless blockchains become faster and cheaper; and as private permissioned distributed ledgers emerge, that enables financial institution and corporate use cases required for regulatory compliance, privacy and scalabilty. Distributed ledgers and blockchains have

Jul 07,2023 06:49

78. A.I. enabled software—awakening data and ideas

The bots are here to helpFor software companies, generative AI can add efficiencies to product development but the revenue side is where things can get even more interesting. For example, digital content design software largely serves professional designers, and thanks to proliferation of Internet advertising, social media and web presence, that market has grown nicely. But AI can help open these design tools to a much larger group, allowing consumers to, say, come up with custom designs for bir

Jul 05,2023 18:03

79. Treasury supply expected to surge while rates to fall by year end

Treasury supply to hit $1 trillion over the coming monthsThe debt ceiling drama has finally come to a close as Washington signed legislation to raise the debt ceiling and avert default. But the next chapter abruptly follows and involves $1T of Treasury Bill issuance over the next 3 months, 5x the average annual supply. Mark Cabana discusses the impact that may have on shorter term Treasuries, the outlook for long dated bonds and whether the agreed upon spending caps will dissuade any of the Trea

Jun 21,2023 12:46

80. More than flipping a switch—bottlenecks in the energy transition

Mine-d the compelling long term story for metalsDemand for metals is expected to ramp further as the world transitions to greener and more sustainable energy. But mining and processing more of these metals will require substantial capex and we'll likely need higher metals prices to spur that investment. Metals strategist Michael Widmer believes we need to invest around $160 billion per year, well above the $90 billion we currently spend. Investment in the electrical grid will have to increase as

Jun 13,2023 19:12

81. No credit crunch yet but the pinch still hurts

Consumer lending remains positive for now but does a weakening consumer threaten that strength?The collapse of several regional banks earlier this year has raised concerns around credit availability, especially as loan standards were already tightening into the spring. While Fed data shows that bank balance sheets are still expanding, loans tied to the commercial & industrial sector have declined 6% annualized over the last 13 weeks and it's consumer lending that has held up better. We discuss w

Jun 01,2023 21:58

82. Poor sentiment helps create a floor but we still see risks

Negative sentiment pervades but depth of possible recession key to market pathOur proprietary survey shows investors are as pessimistic as they have been all year, leading to the biggest shift to bonds from equities since the Global Financial Crisis. But the news is not all bad. Savita Subramanian notes companies have effectively cut costs driving stability or improvement in margins and one reason March quarter results beat expectations. Though not constructive on markets at the index level, she

May 30,2023 22:43

83. Biodiversity preservation growing beyond gardens and into the boardroom

Biodiversity loss presents risks to the planet, company reputations and supply chainsBiodiversity provides us with essential ecosystem services such as pollination, water purification and climate regulation. Mentions of biodiversity in the news have soared 200% over the past two years, suggesting growing interest and awareness. Dimple Gosai, Head of US ESG Research thinks biodiversity related investments may grow 20x from today. In her work she concludes that within higher emitting sectors such

May 17,2023 19:19

84. Thoughts on Digital Assets: Real-world use cases accelerate

Blockchain innovation and app development continuesBlockchains are implementing innovative but differentiated approaches to improving the tradeoff between scalability, decentralization and security. We expect blockchains that expand functionality and incentivize development to become attractive for developers in the near term. Over the longer term, we expect blockchains that prioritize usability and effectively market themselves to gain market share by attracting a robust and diverse ecosystem o

May 09,2023 09:16

85. From ACH to wages, offering insights from a breadth of consumer data

Consumer resilient but gradually slowing The Bank of America Institute joins for a discussion on the many data sources they examine, sources that offer a multi-dimensional look at the consumer. Data suggests the US consumer has weakened somewhat since the start of the year, with household spending growth falling to the lowest level since February 2021. Some of the weakness is likely temporary and follows what was a very strong start to the year, and it's noteworthy that total payments, which goe

May 05,2023 20:36

86. Bank risks abate but tighter lending, slower economy likely approaching

Economic concerns and increased funding costs may combine to help slow a resilient US economyThe consumer economy has remained strong in the face of rate hikes and labor demand has remained resilient. But recent stresses in the banking sector give Michael Gapen more confidence in his view that the US will see a mild recession later this year. Banks had started to tighten lending by the end of the 4Q and a combination of economic concerns as well as higher cost funding and more regulations could

Apr 04,2023 23:44

87. Thoughts on Crypto and Digital Assets: Blockchain innovation and real world uses

Blockchain innovation and app development continuesBlockchains are implementing innovative but differentiated approaches to improving the tradeoff between scalability, decentralization and security. We expect blockchains that expand functionality and incentivize development to become attractive for developers in the near term. Over the longer term, we expect blockchains that prioritize usability and effectively market themselves to gain market share by attracting a robust and diverse ecosystem o

Mar 27,2023 06:08

88. Disrupt and expand; the iPhone moment for AI

We're only tapping into 1% of global data, artificial intelligence should allow us to make use of much moreGenerative AI models such as ChatGPT have dominated headlines and adoption has been particularly swift. But generative AI can do much more than write college essays. Haim Israel thinks this is an "iPhone moment" where a new technology exists that will revolutionize our lives more than many of us currently appreciate. Justin Post describes how generative AI can enhance social media content a

Mar 24,2023 26:36

89. China travel recovery to endure on high savings, easing frictions

Chinese resorts benefiting from pent up demand but international leisure destinations will gradually pick upChina's COVID reopening unleashed nearly 3 years of pent up business and international travel demand. So far, domestic travel has dominated the recovery as international travel has been hampered by passport and visa frictions. Nathan Gee believes that as these constraints ease international travel can recover to 50-60% of normal by year-end. Shaun Kelley explains that while Chinese tourism

Mar 08,2023 22:41

90. Boom in rates, bust in the energy crisis should keep boosting EU banks

EU banks seeing various factors change for the betterSince the Global Financial Crisis, investors have avoided European banks as the companies navigated the low to negative interest rate backdrop and greater regulatory hurdles. But with interest rates having risen and disciplined cost management, European banks have become profitable again thanks in part to a surplus of low cost deposits. Alastair joins us to discuss how European banks are now better capitalized, poised to lend again, expand the

Mar 02,2023 18:19

91. Big year for Alzheimer’s drugs but more innovation still required

Improvement coming but there's much more to goIn the US, more than 6 million Americans are living with Alzheimer's disease and by 2060, Alzheimer's disease cases are predicted to rise to an estimated 14 million people. However, a number of therapeutics are entering the marketplace this year showing promise of reducing plaque in the brain and a slowing of cognitive decline. Data so far suggests relatively modest improvement but Geoff believes a combination of some of these therapies and greater i

Feb 15,2023 16:18

92. Thoughts on Crypto and Digital Assets: The future of money and payments

CBDCs: The future of money and paymentWe view digital currencies, such as central bank digital currencies (CBDCs), as a natural evolution of money and payments. Digital currencies and programmable payments already exist, but the underlying CBDC infrastructure is what makes these digital currencies so transformative and will likely change how and when value is transferred over the next 15 years. There are currently 114 central banks exploring CBDCs, up from 35 in May 2020, representing 58% of cou

Feb 06,2023 08:00

93. Lower goods prices, higher Social Security helps spend but it all comes down to labor

Weaker labor the key to lower spend and inflationConsumer spending is challenged by a number of well-discussed factors including inflation and fading stimulus but there are some positives too. The prices of many goods are down from highs, minimum wages for several states rose at the start of the year and Social Security payments for '23 enjoyed an unusually big boost. Aditya Bhave and Robby Ohmes join us to discuss how these various drivers net out, the outlook for higher and lower income consum

Feb 06,2023 20:14

94. Newest generation of obesity drugs could change the game, access questions remain

Major R&D requirements mean obesity market likely to be dominated by large biopharmasThe CDC estimates the US obesity prevalence is nearly 42%, making it a common and costly disease for Americans, especially as it is associated with other health afflictions. However, a new generation of obesity therapeutics is set to enter the market over the next few years and these offer greater weight loss than prior generations, fewer side effects and may offer cardiovascular benefits. But the initial costs

Jan 30,2023 17:30

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