Global Research Unlocked

From commodities to food packaging, costs have eased but when will consumers and producers benefit?

Food at home CPI has been growing double digits Y/Y but the cost of a number of inputs, from grains to coffee to chicken to transportation are well off highs and back to early '21 levels in some cases. When will consumers benefit and will producers translate these lower costs to higher margins? Bryan Spillane and Peter Galbo join us to discuss areas within the food and beverage groups where prices will remain sticky, areas that could see some price relief and why some beverage companies could be well positioned in an environment of lower costs and thriftier 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.

FTX, Industry Development and Corporate Engagement

FTX's bankcruptcy was a major blow to the digital asset industry's credibility, but development of distributed ledger and blockchain technology is accelerating and driving corporate engagement and adoption. This is a rapidly developing industry that needs time to mature, given much of the technology is less than 3 years old. Alkesh notes that FTX's collapse may lead to increased urgency for a comprehensive regulatory framework, which is critical for mainstream adoption.

 

ou 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.

Better information and more accurately priced perils could have an important impact on where we choose to live

We've witnessed costly floods and wildfires over the last several years, raising questions about whether consumers and lenders may begin to avoid certain parts of the country and certain properties. We're joined by Matthew Eby, CEO of First Street Foundation to discuss how they're making data on flood, heat and wildfires more accessible to consumers, federal agencies, insurance companies, banks and investors which could impact future migration patterns. We also hear from analyst Ian Rogow of BofA Global Research on how all this may impact municipal bonds.

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.

FTX, Alameda, Illiquidity & Contagion

FTX and its affiliated company Alameda used illiquid tokens as collateral, which resulted in the token losing its value, to liquidity issues that have ended in the bankruptcy filling. The digital assets ecosystem has been impacted by these events and the top 100 tokens market value dropped by 15%-20%. Also, regulators may ramp up the enforcement actions to protect investors in the US. Alkesh noted that the blockchain technology is still finding application and adoption, and these events will not affect that trend.

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.

Demand for European luxury brands in non-traditional luxury cities one of the many growth drivers

Luxury goods sales have grown at a 9% annual rate over the last 20 years. Growth drivers have shifted over time but Ashley Wallace sees more ahead. And this compelling growth suggests to Ashley that the the selloff in shares provides an opportunity. Cultural relevance is rising, with increasing mentions of luxury brands in song lyrics, including Beyonce's 2022 "Renaissance" album, and strong connections to top Instagram accounts. And while expansion into China may be slowing, less traditional US luxury markets, including Charleston, are becoming more relevant.

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.

As the US pivots back to the great power competition, defense spending likely to be supported for years

Ron Epstein joins us to discuss how the US national security strategy has pivoted from addressing non-nation threats such as terrorism to addressing threats from competitor nation states. Protecting against these nation states requires the ability to project power over long distances, meaning a prioritization of spend on equipment including submarines and aircraft carriers. Ron also explains why defense companies tend to have high returns, low capex risk and why inflation and interest rates are much less of an issue for the industry than for other parts of the market.

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.

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.