OPEC Cuts, Inflation Reduction Act, RepowerEU could ultimately boost the US through energy dominance

While higher rates and slower growth have driven down commodity prices, oil prices remain well bid, something Francisco Blanch expects to continue. Fearing slower global growth, OPEC+ cut oil production but other factors played into the cut too, including general inflation. But higher oil isn't necessarily problematic for the US longer term. We discuss how the US, especially if it refrains from imposing energy export bans, can use a combination of energy production and renewables to become more energy dominant, boosting its global clout and strengthening its relationship with Europe. For more on the OPEC+ cut and broader impact, please see Issue #1 of our FAQ series.

 

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

Software tends to feel a recession later than other areas

S&P software enjoyed a great run in the back half of last decade but higher interest rates and elongating sales cycles haven't been kind to the group over the last year. Brad Sills joins to discuss how he expects the onset of a recession to be an overhang for the group. Still, he points out that many stocks are getting very little credit for growth, as they're mostly trading on the value of their recurring business. Brad discusses why renewal rates are so important for software companies and why there's still substantial opportunity ahead, especially in small and medium business software and migration to the cloud. 

 

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

China's economy is expected to improve next year as many other economies slow

China's zero-COVID policy has been a drag on economic activity, property markets and popular sentiment in China and we expect a gradual reopening to start later this year. Thus, China's economy is expected to grow next year as the rest of the world deals with persistent inflation, an energy crisis and what's likely to be a global recession. Winnie joins us to discuss how the reopening will drive demand for discretionary products and services over staples. She also provides an update on China's regulatory crackdown of the internet sector, how the goal of an innovation-driven economy will be impacted by escalating geopolitical tensions with the US and will address the outlook for equities next year.

 

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

Digital assets fall as rates rise, Ethereum's next upgrade, US regulatory update

Digital assets are acting like high growth technology and were impacted earlier this year due to higher than expected inflation and rate hikes, but stablecoins grew over the last few weeks. Alkesh explains the successful Ethereum merge and what is expected of the next upgrade on the platform. The current proposals for a comprehensive US regulatory framework identified opprotunities and risks across the ecosystem.

 

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

Why are labor markets so strong and when will wage gains finally slow?

The reopening of the economy led to another leg higher in labor demand and even as some jobs related to the movement of goods have become redundant, demand from services industries, which tend to be more labor intensive, kept labor tight. Adding to the wage strength, job switchers tended to get the biggest raises. But with much of the reopening behind us and with the Fed aggressively raising rates, Michael Gapen joins us to discuss what's ahead for labor, whether there's room for labor supply to rise from here and whether wages may be more stubborn this cycle.

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

Can the Inflation Reduction Act live up to its ambitious name?

The IRA or Inflation Reduction Act passed last month is the largest climate and energy package in U.S. history. It earmarks nearly $370 billion in spending towards renewable energy. And while the benefits for residential solar are fairly clear, here we focus on the impact to utilities and the impediments and pitfalls around the energy transition. Julien discusses why corporate and industrial customers may be a critical force behind the transition, the role of nuclear and hydrogen, the need for transmission and pipeline infrastructure and what all of this could mean for power prices.

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

Uncertainty remains as buying momentum and Ethereum Merge optimism fade

Buying momentum in the digital asset sector is fading as investors rotate defensively into stablecoins, likely due to uncertainty around the bear-market bounce's sustainability and potential for a hard recession. Alkesh explains the implications of Ethereum's Merge upgrade, which is likely to occur around September 15th.

 

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

Managed care companies have transformed over the past decade. In 2008, the average managed care company generated about 58% of revenue from commercial or individual plans; today that number has fallen to 18%. Health care companies have increasingly diversified their revenue mix into government programs and also outside of the core health insurance business as they increasingly own physician groups and home health providers. Kevin Fischbeck joins us to discuss this structural change and how it is that patients, doctors and managed care all seem to be coming out ahead. Also, Kevin addresses the latest on labor supply and implications from the recently passed Inflation Reduction Act.

You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

5G benefits in the future, critical service now

Telecom companies provide a service to consumers that’s basically a utility. But over the past few quarters, telecom stocks have traded close to all-time lows on a P/E basis. David Barden joins us to discuss how networks have improved to the point where there’s much less differentiation and many customers are bringing their own device, all of which has upped the competitive quotient. Still, wireless companies have spent billions on 5G while much of the revenue opportunity is still ahead. And fixed wireless broadband has boomed, now accounting for about 100% of net retail broadband adds from close to 0% in early 2021. It’s a product that offers a compelling trade down option for many consumers. You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.

EU gas likely to remain tight for years, a persistent issue for industries and consumers

High prices have already destroyed about 10% of European gas demand but curtailed flows from Nord Stream 1 could require another 10% decline in gas use. Industrial demand is likely to take the biggest hit from these curtailments and we look at the Aerospace and Defense industry specifically to understand how various parts of it may be impacted. Europe has already committed to using other sources of energy, from LNG (liquid natural gas) to renewables, but this will take time and in the interim, many European companies will be forced to find their own solutions, which may include moving production from Europe. You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.

 

"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

©2022 Bank of America Corporation. All rights reserved.