Market Updates
December 9, 2019
Policy Turns Stimulative
Ever since the great recession of 2008 –2009, major global
central banks have been fighting to head off deflation and get
inflation back up to 2% targets. The Fed, the European Central Bank
(ECB), and the Bank of Japan have all failed in this effort as
inflation in each region has consistently fallen short of this
objective despite unprecedented measures, including negative interest
rates, quantitative easing, and explicit forward guidance of
lower-for-longer interest rates.
December 2, 2019
Unemployment Unlikely To Increase Much in 2020, Consistent with
Continued Expansion
The damage from Fed tightening has been meaningful, but absent
upside inflation pressures, the Fed had the ability to reverse course
before triggering a recession. Our expectations for a new upturn in
the U.S. and global manufacturing cycle in response to central-bank
easing and fiscal stimulus in a growing number of countries are
supported by the wide range of improving economic data thus far, from
a housing-sector revival, rising consumer and business expectations,
and a third consecutive monthly increase in the Market manufacturing
index in the U.S., to a stabilization in manufacturing conditions in
the Eurozone and China.
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November 25, 2019
Going Granular: U.S. Trade at the State Level
Given the swirl of uncertainty surrounding U.S. trade policy,
and the near-term strength of the U.S. dollar, U.S. exports have held
up rather well this year. Indeed, through the first nine months of
2019, U.S. exports of goods and services (seasonally adjusted) were
down just 0.4% from the same period a year ago. That is a respectable
performance given all the noise around U.S. trade.
November 18, 2019
Dueling Innovation Ecosystems
Investors are always looking for the best new idea. From a
top-down perspective that means finding the countries with the most
supportive innovation ecosystems and then digging deeper into sectors,
industries and individual companies. The U.S.-China technology and
trade conflict has brought two contrasting innovation ecosystems front
and center as the countries race for economic supremacy.
Opinions are those of the author and are subject to change.
This material was prepared by the Chief Investment Office (CIO) and is not a publication of BofA Merrill Lynch 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 CIO, 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.
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 suitable for 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.
Nonfinancial assets, such as closely-held businesses, real estate, oil, gas and mineral properties, and timber, farm and ranch land, are complex in nature and involve risks including total loss of value. Special risk considerations include natural events (for example, earthquakes or fires), complex tax considerations, and lack of liquidity. Nonfinancial assets are not suitable for all investors.
