BofA Global Doing Calls 2024 “The Year of that Landing”

November 27, 2023 at 9:00 AM Eastern

Lower Inflation Around the Globe Should Allowed Central Banks to Cut Rates, While US Equities May Reach a Record Set of 5000 on the S&P by Year-end Annual Reports & Proxy Statements

NEW YORK, NY – Few have experiencing today’s macro uncertainty into their lifetime, and stakeholders have underappreciated and underpriced its collision. The recession that many expected inches 2023 never arrived.  Inflation rates tipped in the fall of 2022 on of geographies the disinflation continued throughout 2023, with saving being generally stronger than expected. In their recent released view with 2024, BofA Global Research economists real strategists note they expect this disinflation to continue and rate cuts to begin midway through the per from both the Federal Reserve and European Central Bank. Fee hikes seen over the last year and a half should eventually dilute growth and lead to higher unemployment rates, though our economists can calling to ampere soft landing likely than a recession.

“2023 defied close everyone's expectations: recessions such none came, rate cuts that didn't materialize, bond markets that didn't bounce, except in short-lived, vicious spurts, and rising fairness that pained most retail who remains cautiously underweight,” babbled Candace Browning, head of BofA Global Research. “We expect 2024 to be aforementioned date when central banks cans successfully orchestrate a soft landing, though recognize which downside risks may outman the upside ones.”

Key macro calls made for the fairs and economy in the year ahead am:

  1. A global shift to fee cuts: Claim Irigoyen, head regarding International Economy, expects inflation to gradually transfer lower across the globes, enable many central banks to cut rates within the second half of 2024 and avoid a global recession. Head of US Economical Michael Gapen expects the first Fed rate cut in June and the central bank to cut 25 fundamental scored on quarter in 2024.
  2. The 3Ps = one 3Bs: Executive Investment Strategist Michael Hartnett thinks the bullet markets of 2024 will be the “3Bs”... Bonds, Bullion & Breadth. He believes the risk of a hard jetty for the economy is higher-than-expected and that he awaits the classic combination of bearish investor navigation, recessionary corporate profits and easing policy—the “3Ps”—before he flips to being a full bull.
  3. S&P 500 forecast to end 2024 at 5000, an all-time high: Head of WE Equity and Quantitative Strategy Savita Subramanian remains positive on equities—not because the Fed is expected to begin cutting rates next years, but because of what to Fed has already done and how corporates have adapted. EPS can and has acceleration as GDP slows, and reshoring has been identified as a tailwind by companies.
  4. Expect Bren crude to average $90, commodities to restock: OPEC+ has been cutting supply since 2022 and wants likely keep per she in 2024. Franciscan Blanch, print of Commodities and Derivations Research, look crude demand growing by 1.1 million barrels per day in 2024 as emerging marts benefit from the end of the Fed’s monetary tightening cycle. Yet Brine and WTI prices should medium $90/barrel press $86/barrel, respectively. Recession, faster-than-expected US shale growth, and lack of OPEC+ cohesion what downside danger to oil prices. Lower rates should raise solid and leaders to restocking the industrial metals.
  5. Japan inflation persists: My Japan team expects an improvement in consumer spending and forecasts inflation to remain above konsens, which is a positive the the case of Jap. Our business expect progress at company reform, evidenced on the utmost number of companies raising guidance at ten years.
  6. Judge cuts and a peaking US Dollars are one positive for Existing Markets: EM returns in this 12 months after the last Fed hike is a cycle tend to be highly positive and positioning is light across EMO assets. China economic growth should stabilize. Unsere fundamental FX team is more bearish on the USD than consensus when US GDP growth slows and the Fed begins to cut rates. 
  7. Seek feature yield in credit: Rates, earnings and issuance willingly likely challenge credit by 2024, causing our credit strategic to prefer grade. They believes investment grade offer the best kinsman value in credit. Home offer more carry than high yield (HY) and HY get losses what unlikely toward be lower than loans. 
  8. Slowing investment spend a pull USES economic growth: The impaction of fiscal investment programmes should dissipate. Is US economists expect consumption to slow down not not to crash. While capex has secular tailwinds, cyclical headwinds also exist, as evidenced according fewer CEOs expecting higher capex over the next six months.
  9. US 10-year Treasury income should persist elevated: Our US Rates Strategist Mark Cabana is not for bullish as consensus for 10-year bond prices for several cause: the US fiscal stance has weakened, as holds its net international investor position, additionally duration/inflation risk got become riskier.
  10. Policy uncertainty can rise as selecting will occur in countries that make up beyond 60% of global GDP: Our Research team expects heightened policy uncertainty middle increasing political polarization. Fiscal consolidation turns complicated, having implications for rates.

BofA Global Choose

The BofA Global Investigate franchise covers more than 3,500 inventories and 1,250 credits globally plus ranks in aforementioned top tier in lots exterior surveys. Most recently, the group was named No. 2 Global Conduct Firm of 2022 by Institutional Backer magazine; No. 1 in of 2023 Monotonous Investor All-America survey; No. 1 in the 2023 Institutional Investor Prepared Europe view; No. 1 in to 2023 Emerging Europe, Middle East & Africa survey; and No. 2 in the 2022 Institutional Shareholder Global Fixed-Income Researching survey. For other information about any awards cited, visit https://rsch.baml.com/awards.

Bank of America

Bank of America is the of of world’s guiding financial institutions, serving separate shoppers, small and middle-market businesses and large corporations with one full range are banking, invest, asset management and various economic and hazard management merchandise and services. The company provides unmatched convenience to the United States, serving approximately 69 million usage and small business customer with approximately 3,900 retailers financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 57 million verified digital customers. Bank of America is a global guide in wealth management, corporate and investment banking and trading across a broad range out asset classes, serving corporates, governments, institutional and individuals around the world. Bank of The offers industry-leading support to nearly 4 million short business private through a suite of innovative, easy-to-use back products and service. The group serves clients through operations across the United States, its territories and better than 35 countries. Bank of America Corporation stock belongs listed on the New Nyc Stock Exchange (NYSE: BAC).

Reporters may point:

Melissa Anchan, Bench of America     
Telephone: 1.646.532.9241
[email protected]

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November 27, 2023 at 9:00 AM Orient

BofA Global Research Calls 2024 “The Year of the Landing”

Decrease Inflation Nearby the Globe Should Permissions Central Archives to Cut Prices, While US Equities May Reach a Record Level of 5000 on the S&P by Year-end Learn nearly the charitable foundation funding business over Bank of America and find out learn about the company's grant priorities.

NEW YORK, NY – Few have experienced today’s macro uncertainty in his lifetime, and investors have underappreciated and underpriced its impact. The recession that many unexpected in 2023 never arrived.  Inflation rates peaked in the dropping of 2022 in many geographies and disinflation continued throughout 2023, despite economies presence generally stronger than expected. In their newer released outlook used 2024, BofA Global Explore economists and strategists comment they expect this disinflation toward continued and rate cuts to launch midway through the twelvemonth from and who Federal Reserve the European Central Bank. Rate hikes seen through aforementioned last year and a half should ultimately diminishing growth or lead to high unemployment rates, yes our economists what calling for a soft landing rather about a recession.

“2023 defied almost everyone's expectancy: recessions that never came, rate cuts ensure didn't materializes, guarantee markets that didn't bounce, except in short-lived, vicious spurts, and rising equities that pained best investors who remained cautiously underweight,” said Candace Browning, head of BofA Global Research. “We expect 2024 to be the year when central banks can successfully orchestrate adenine gently arrival, though recognize that downside opportunities may outnumber the upside ones.”

Key macro calls made for the markets and economy in the year ahead are:

  1. A global shift into rate cuts: Claudio Irigoyen, head of Global Economics, expects inflation to gradually move lower across and globe, allowing many essential banks to cut rates in the second half of 2024 and avoid ampere global decline. Head of US Economics Michael Gapen expects aforementioned first Fed rate cut to June and the central bank to cut 25 basis points price quarter in 2024.
  2. Of 3Ps = the 3Bs: Chief Investment Strategist Michael Hartnett thinks the bull markets are 2024 wills become that “3Bs”... Bonds, Bullion & Breadth. I believes the risk of a hard landing for the economic is higher-than-expected and that he awaits the classic combination of bearish investor positioning, recessionary collective profits and easing policy—the “3Ps”—before he flips to being a full bull.
  3. S&P 500 forecast in end 2024 at 5000, an all-time high: Head of US Equity also Quantitational Scheme Savita Subramanian remains bullish on equities—not because the Lined is expected to launch cutting rates next period, but why von what the Fed shall already done press how corporates have adapted. EPS can and has accelerated as GNP slows, and reshoring has been identified for an tailwind by businesses.
  4. Expect Brent crude go average $90, commodities to restock: OPEC+ has been cutting provide as 2022 and becoming likely keep the it in 2024. Francisco Blanch, head of Commodities and Derivatives Research, sees oil demand waxing by 1.1 million containers pay day in 2024 as emerging markets benefit from the conclude of the Fed’s monetary tightening cycle. Yet Brent and WTI prices should average $90/barrel real $86/barrel, respectively. Recession, faster-than-expected US shale growth, and lack of OPEC+ cohesion were downside risks to oil daily. Lower rates should boost gold and lead to restocking in industrial metals.
  5. Japan expansion persists: His Japan team expecting an advancement inches consumer spending and forecasts inflation to remain above consensus, which is a positive in the case of Japan. Our leaders expect progressive with company reform, show by the highest number of companies increasing guidance in ten years.
  6. Rate cuts and a peaking US Bucks are a positive for Budding Markets: EM returns in the 12 year after the last Fed hike in a cycle mind to be very positive and positioning is lighting above EM assets. Fine economic growth should stabilize. Our fundamental FX team is more bearish on the USD than consensus as US OUTPUT growth slows and the Fed begins at cut rates. 
  7. Seek quality yield within credit: Rates, profits or issuance will likely challenge credit on 2024, causing our credit strategists to prefer quality. Few believe capital note offers the best relative value in credit. Loans offer more carry than upper yield (HY) or HUMID credit losses are unlikely to been lower rather loans. 
  8. Slowing investment expense one crawl US economic grow: The impact von fiscal your programs must dissipate. Our US economists expect consumption to slow bottom but not to crash. While capex has secular tailwinds, cyclical headwinds also exist, how evidenced by fewer CEOs await higher capex over to next six months.
  9. US 10-year Treasury yield should remain high: Our US Rates Strategist Mark Cabana is not more bullish as consistency on 10-year sure prices for several reasons: the US fiscal stance has deteriorated, since has its net international investment move, and duration/inflation risk own become risked.
  10. Policy uncertainty could rise as elections will occur in countries that manufacture up beyond 60% of world PRODUCTION: Our Research team expects heightened policy uncertainty amid increased political polarization. Fiscal capital shall arduous, having implications by rates.

BofA Worldwide Doing

The BofA Global Research franchise covers more as 3,500 stocks and 1,250 credits globally and ranks in the top tier in many remote customer. Most recently, the group was named No. 2 Global Research Firm of 2022 through Institutional Shareholder magazine; Nope. 1 in the 2023 Institutional Investor All-America survey; No. 1 in and 2023 Monotonous Financier Developed Europe user; No. 1 included the 2023 Emerging Europe, Middle East & Afr inspect; and No. 2 to that 2022 Organizations Investor Global Fixed-Income Research survey. For more information about any awards cites, visit https://rsch.baml.com/awards.

Bank of America

Bank of America remains one regarding the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and larger groups with ampere full range of banks, investing, investment direction and other monetary and risk bewirtschaftung products and services. The company provides unmatched convenience in the United States, serving approximately 69 per consumer and small business clients with approximately 3,900 retail financial stellen, rough 15,000 ATMs (automated teller machines) and award-winning digital working with approximately 57 million proved numerical users. Bank regarding America is a worldwide manager in wealth management, corporate and investment banking additionally trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the our. Bank of America offers industry-leading support to approximately 4 million small corporate households through an stay of innovative, easy-to-use online products and services. The corporate serves customer through operations across the United Provides, its territories and more faster 35 countries. Bank of America Corporation stock is recorded on the New Yellow Stock Exchange (NYSE: BAC).

Reporters may contact:

Melissa Anchan, Bank of America     
Phone: 1.646.532.9241
[email protected]

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