Bank of America Merrill Lynch 2020 Market Outlook: Profits Rise, Economy Slows, Globalization Peaks, and Business-as-Usual Investing Comes to an End
NEW YORK--(BUSINESS WIRE)--Dec 3, 2019--
Key drivers of this year’s late-cycle bull market gains are expected to shift as the global markets enter the new year, according to BofA Merrill Lynch Global Research, which was recently named Institutional Investor’s top research firm in the world. In its year-ahead outlook, the research team forecasts a bottoming of economic growth in the spring as trade war tensions ease, and relatively low recession risk.
Key highlights include:
“The new year and decade begin near the tail end of the longest bull market on record, and despite recent strong gains, investor anxiety remains at a high level,” said Candace Browning, head of BofA Merrill Lynch Global Research. “Many of the driving factors – central bank policy, globalization, oil – have peaked, and new economic paradigms are emerging in response to a different set of challenges facing the world’s social, environment, political and economic systems. Rather than focusing on the downside, we think the opportunity for investors will be found in what happens next.”
At the annual Bank of America Merrill Lynch Year Ahead Outlook presentation today in New York City, the firm’s top strategists and economists discussed the overarching themes that are transforming economies and investing paradigms in the year ahead and throughout the 2020s. Notable among these is the transition to stronger local and regional economic ties, following three decades of economic growth fueled by the benefits of globalization – an unchecked, cross-border free flow of goods, people and capital that rewarded cheap labor and low consumer prices. The shift from globalization to localization and other global macro trends underpins much of Bank of America Merrill Lynch’s outlook on the markets and economy next year.
Key macro calls made for the markets and economy in the year ahead are:
Given macro trends impacting the markets, business-as-usual investing is likely to come to an end. Localization, rather than globalization, has major implications for global growth, and a rise in moral capitalism is changing corporate behavior, shifting the focus from shareholders to stakeholders. Investors should consider several longer-term trends for 2020 and beyond: (1) from global to local, (2) from trade war to tech war, (3) from bonds to stocks, and (4) from short-term gains to long-term growth, where environmental, social and governance (ESG) considerations can help isolate the long-term growth stories.
To learn more about these major themes, please listen to a podcast hosted by Candace Browning, “ What the 2020s could bring for the markets – and our financial lives.”
BofA Merrill Lynch Global Research
The BofA Merrill Lynch Global Research franchise covers more than 3,000 stocks and 1,250 credits globally and ranks in the top tier in many external surveys. Most recently, the group was named No. 1 Global Research Firm of 2019 by Institutional Investor magazine; No. 1 in the 2019 Institutional Investor Global Fixed-Income Research survey and Emerging EMEA surveys; No. 2 in the 2019 Institutional Investor All-America survey; and No. 4 in the 2019 Institutional Investor All-Asia and All-Europe surveys. For more information about any awards cited, visit https://go.bofa.com/awards.
Bank of America
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers, including approximately 2,400 lending centers, 2,600 financial centers with a Consumer Investment Financial Solutions Advisor and 1,900 business centers; approximately 16,600 ATMs; and award-winning digital banking with nearly 38 million active users, including approximately 29 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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PUB: 12/03/2019 11:30 AM/DISC: 12/03/2019 11:30 AM