Capital Market Outlook
March 16, 2020
IN THIS ISSUE
- Market Volatility Update — We believe we are in a two-stage bottoming process in the equity markets. One includes the height of fear regarding the financial markets due to liquidity concerns, which is the current environment. And then a second bottom based on economic concerns once more data is available regarding the length and magnitude of the containment procedures.
- Macro Strategy — Time to Get Serious about Inflation — A coordinated monetary and fiscal response that will support nominal magnitudes is beginning. A “fiscal bazooka" is in the early stages to complete the coming “unprecedented policy coordination."
- Global Market View —The Other Side: Buying Opportunities in the Post-Covid-19 World — While near-term, uncertainty and volatility will remain the norm, investors should not lose sight of buying opportunities on the other side—whether healthcare, automation/robotics/artificial intelligence, or e-commerce.
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.
