Global Research Unlocked

By BofA Global ResearchBusiness Investing

Global Research Unlocked episodes

March 18, 2024 ESG is evolving, but not going away; new EU rules to have broad impact
ESG topics still impacting stocks and there's more to come
US 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 fuels and firearms manufacturers and legislation in other states that seeks to keep pensions from investing in fossil fuels and firearms. There have been legal challenges to California's legislation but changes coming from the EU will still be relevant for global companies regardless of the California outcomes. The SEC will vote on the long-awaited climate disclosure rule later today. Dimple Gosai hosts Michael Littenberg of law firm Ropes & Gray to discuss the evolving ESG regulatory landscape and which regulations may impact ESG investors.

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.
©2024 Bank of America Corporation. All rights reserved.
24 min
February 26, 2024 Slowing the shrink; the impact and impetus behind a QT moderation
Rate policy isn't the only big Fed change likely for '24
Since 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 sector will have less total supply to absorb. And while some investors are fond of making the connection between the Fed balance sheet and the S&P 500, it's interesting that the S&P is making new highs while the balance sheet has shrunk, albeit from elevated levels. Mike Gapen discusses why that may be happening.
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.
©2024 Bank of America Corporation. All rights reserved.

23 min
February 26, 2024 Global Wave inflects, that often means swell outcomes for EM, cyclicals, equities
Global Wave should start to buoy Emerging Markets
The 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 improvement in riskier regions, cyclicals also tend to outperform defensives in the year after the trough. Nigel does note there are 3 risks to the upturn, (1) if inflation is sticky and monetary policy remains tighter, (2) if China's recovery is delayed or muted, this could lead to a drag on the global economy and (3) if we see an earnings downturn, perhaps because of higher rates.
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.
©2024 Bank of America Corporation. All rights reserved.
17 min
February 12, 2024 Merger Monday not yet ready to take over but expect M&A headlines in certain areas
M&A activity should increase but not everywhere
M&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 inexpensive relative to large caps-another M&A positive. But Jill believes that M&A will be focused in certain parts of the market. Bryan Spillane and Peter Galbo say consumer staples companies with healthy balance sheets could engage in M&A as it becomes difficult to push price further and these companies seek other ways to grow. EB Poonawala suggests that banks could benefit from both higher M&A fees and what could be an uptick in bank mergers, especially if there's political change in November.

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.
©2024 Bank of America Corporation. All rights reserved.
20 min
January 30, 2024 Upward sloping natural gas price curve means gas equities likely to climb higher
The dynamics of the US gas market about to change
US 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. Significantly more LNG exports are expected to come online over the next 4-6 years, boosting demand for natural gas and reflecting positively for gas equities. Higher exports will require a higher clearing price to incentivize production, which is why the gas curve is upward sloping, a different picture than oil. Doug Leggate joins to discuss what all of this means for US E&P companies, how more M&A in the sector will lower costs for producers, and how the correlation of population growth will play a role in oil demand over the next decade.

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.
©2024 Bank of America Corporation. All rights reserved.
27 min
January 12, 2024 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 content, another positive for profitability. But it's important to weigh these positives against the headwinds from a declining linear TV business, which is problematic for some of the integrated media companies. Jessica Reif Ehrlich joins us to discuss her outlook for this dynamic group.
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.
©2024 Bank of America Corporation. All rights reserved.
19 min
January 03, 2024 Our Outlook for 2024: Breadth in Rate Cuts and Markets
Investors face a much different backdrop in 2024
Our 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 join the podcast to answer these questions and provide their outlook for 2024. In case you're interested in a particular speaker, you can skip to a particular time: Claudio Irigoyen (0:58), Michael Hartnett (9:46), Mark Cabana (22:00), and Savita Subramanian (29:38).
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.
©2024 Bank of America Corporation. All rights reserved.
39 min
December 19, 2023 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 available to address demand and supply issues. Haim explains how smart technology investments in water infrastructure can substantially reduce the 1/3 of water lost from leaks. More targeted irrigation, smart meters, these can help significantly.

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.
©2023 Bank of America Corporation. All rights reserved.
24 min
December 06, 2023 Interrupting the cycle of high rates and higher deficits
Heavy supply likely limits the downside in 10Y yields
Treasury 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 will need to be refinanced over the next year, the vicious cycle created by higher rates, but the reprieve we could get if rates and the economy cool off . . . assuming the cooling isn't of the deep freeze variety

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.
©2023 Bank of America Corporation. All rights reserved.
18 min
November 24, 2023 A real boost to operating margins through artificial intelligence
Many businesses to see AI benefits within medium term
The 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 3-5 years. Semis, software and data centers are likely to be near-term beneficiaries according to Alkesh Shah. Many of the components needed to build data centers are produced by Alex Virgo's industrial companies. Alec Stranahan thinks AI could reduce inefficiencies within Biotech and could cut the cost of drug development in half.

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.
©2023 Bank of America Corporation. All rights reserved.
25 min

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