Global Research Unlocked

By BofA Global ResearchBusiness Investing

Global Research Unlocked episodes

November 10, 2023 The Bull Case for US Stocks
Productivity gains from AI will drive margin growth
The 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 efficiency, a positive for earnings and the multiple the market would be willing to pay. And when excluding the seven stocks that have driven the S&P so far this year, the S&P earnings multiple looks more reasonable anyway. AI should help in this push for productivity.
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.
14 min
November 10, 2023 GLP-1s may save healthcare billions but could cost companies growth and revenues
GLP-1 impact should be big but lots of puts and takes
Almost 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 penetration of these drugs is even higher, the impact on overall calorie consumption is likely to be small. Patients who were too obese for knee replacements could now be eligible, according Travis Steed, while some patients who lose weight may delay surgery for a period of time but its hard to see these drugs having a meaningful impact on knee replacement growth 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.
©2023 Bank of America Corporation. All rights reserved.
22 min
October 27, 2023 The time to own Emerging Markets is not now, but it may be near
The EM growth story should unfold in the spring
Oil 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 the Fed is just about to cut rates or is cutting rates. While the first cuts probably won't come until around the middle of 2024, the Spring may be the time to turn cyclically bullish on EM. In the mean time, David recommends buying credit protection on liquid EM sovereign bonds as a hedge-he believes EM credit spreads may be the next shoe to drop.

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
October 11, 2023 Future of EV charging depends on whether it’s done at the gym or beside I-95
Future of charging depends on complicated questions
Electric 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 around a standard but why there's a place for other types of charging, especially at home, your gym or shopping center. Alex sees an opportunity within fleet networks where driving patterns and charging are more predictable, which should help infrastructure investors get comfortable funding them.

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.
21 min
October 04, 2023 Deleting the middle seat through aviation technology
Narrowbody aircrafts will usher in a new era of aviation
The 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 offer lower operating costs per seat mile. But there's one narrowbody aircraft, the A321, that's done exceedingly well and Ron Epstein believes there's an opportunity for a competitor to offer an aircraft with improvements over the A321. However, this plane could look quite a bit different than what you're used to seeing pulling up to the gate. It also might dispatch with the dreaded middle seat. The risk, of course, is that it'll be expensive to develop, subject to delays and overruns and Ron will offer thoughts there too.

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
20 min
September 21, 2023 Inflation means shopping around for gasoline and hedges
Sticky inflation means the Fed put slips away
Volatility 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 alternative to the Fed put--one can own volatility. Inflation also means that Treasuries aren't the hedge they once were, instead, Bruno Braizinha has been having conversations with investors about owning volatility as their hedge rather than Treasuries. Bruno also warns us that the full impact of rate hikes hasn't hit yet.

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.
27 min
September 14, 2023 Welcoming inflation back to Japan
Inflation is positive for Japan and BoJ wants it to sustain
Japan'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 into Japanese equities and with higher rates, Japanese bonds may start to look attractive relative to foreign bonds, according to Izumi Devalier. Machinery analyst Kenjin Hotta highlights the particularly attractive Japanese factory automation sector. One that benefits from global supply chain shifts, investment in EVs and where growth can be another positive for the Japanese economy.

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.
27 min
August 23, 2023 Lithium supply charges ahead, outpacing torque-y demand
Lithium price likely to fall and take battery costs down too
Lithium 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 and auto OEMs (original equipment manufacturers) that are working to provide consumers with more affordable EV options. But ultimately we do expect lithium prices to balance out at a fairly high level, relative to history, and the abundance of lithium supply means that, over the next few years, batteries are unlikely to be a constraint when it comes to vehicle availability.
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.
28 min
August 14, 2023 Prepare for landing — Sky high international travel demand to normalize
You can't fly to Ithaca when you're in Italy
US 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 return to domestic routes. International profitability is well above pre-pandemic levels but that may not last. Cruise lines have lagged the recovery pace of airlines and things only returned to normal this year, so there's likely more of a recovery ahead. Plus, relative to airlines, cruise lines do tend to have more bookings visibility and less exposure to volatile fuel 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.
©2023 Bank of America Corporation. All rights reserved.
20 min
August 04, 2023 End of easy money means beginning of productivity improvements
AI to drive productivity and margin expansion over time
Companies 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 slowed since 1Q23 and she expects to see stabilizing margins going forward. A.I. helps growth and tech but also should help efficiency leaders in less efficient sectors.

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.
21 min

About Global Research Unlocked

From the publisher's feed

Listen and subscribe to Global Research Unlocked. A podcast from BofA Global Research. Nuanced insights that can help you chart the right path. Our industry-leading analysts discuss what’s emerging –…