Capital Market Outlook
October 20, 2025
IN THIS ISSUE
- Macro Strategy — Manufacturing Rebound Soft But Poised To Strengthen: Rate cuts, fading tariff headwinds, and fiscal incentives are expected to benefit manufacturing activity and economic growth beyond current pockets of strength, likely buoying risk assets in coming quarters.
- Market View — Should Markets Be Concerned About Dollar Debasement?: Despite growing debasement concerns, we do not view the surge in precious metals prices as portending a period of disorderly decline for the U.S. dollar. Precious metals and precious metal producers should continue to benefit, particularly as global central banks diversify their reserves.
- Thought of the Week — Trick or Treat: What Could Spook This Market?: Developments that could potentially spook this market in the near-term include elevated trade tensions and the potential hit to earnings, concerns about the durability of Artificial Intelligence spending and the outlook for monetization, and spillover effects of a prolonged government shutdown.
Important Disclosures
Opinions and data are as of the date of this report and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate 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.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S" or “Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.").
All recommendations must be considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the best interest of all investors.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Bonds are subject to interest rate, inflation and credit risks. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.
