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When Doves Fly the Bull Cycle Remains

The Federal Reserve recently appeared to suspend its plan to raise rates four times this year, shifting from hawkish to dovish, at least for now. As such, the Fed's focus seems to be less on controlling growth and more on controlling inflation – or re-inducing inflation. This pause should make the cost of capital more transparent, a step we think will be broadly positive for multiples, investor confidence and earnings over the next few months. Earnings growth for 2019 overall could be around 5%, no doubt prompting upward earnings revisions in the first half of the year. We believe this shift may be just the thing to re-energize the longest bull market in history. To learn more, please listen to this this audio recording from our Chief Investment Officer, Chris Hyzy.

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The views expressed are th­ose of the Chief Investment Office (CIO) only and are subject to change. This information should not be construed as investment advice. It is presented for information purposes only and is not intended to be either a specific offer by any Merrill Lynch or U.S. Trust entity to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.

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