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Capital Market Outlook

March 2, 2020

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March 2, 2020

IN THIS ISSUE

  • Macro Strategy Productivity Trend Up — Economists do not agree on what caused the economy’s dismal productivity performance between 2010-2016, and have been particularly baffled since it occurred during a period of rapid technological progress. They have also been surprised by its recent improving trend.
  • Global Market View Supply, Demand and Dollar Shock: The Triple Threat to U.S. Companies’ Foreign Earnings — Given growing Covid-19 virus risks, the global backdrop for U.S. foreign earnings appears to be deteriorating once again.
  • Thought of the Week — How Do You Price the Unknown? A Volatility Spike Illustrates the Challenge — At these elevated volatility levels of measured risk, the hurdle for market conditions to worsen is also higher, and the slope of volatility forward curves suggests lower expectations for uncertainty down the line.

Read the full issue here

Important Disclosures

 

All data, projections and opinions are as of the date of this report and subject to change.

 

This material was prepared by the Chief Investment Office (CIO) and is not a publication of BofA Global Research. The views expressed are those of the 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 or Bank of America 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.

 

Global Wealth & Investment Management (GWIM) is a division of Bank of America Corporation. The Chief Investment Office, which provides investment strategies, due diligence, portfolio construction guidance and wealth management solutions for GWIM clients, is part of the Investment Solutions Group (ISG) of GWIM.

 

Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.

 

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 suitable for all investors.

 

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.

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