[Music in background]
[Animated glitches containing various letters flip to spell out the following financial terms]
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Bear Market
Business Cycle
Risks
Bull Market
Fixed Income
Inflation
Equities
Diversification
Interest Rates
Opportunities
Geopolitics
Market Catalysts
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Market Decode
On-screen disclaimer:
Please read important information at the end of this program. Recorded on 11/13/2024.
[Chris Hyzy speaking throughout]
It's that time again. Time to start looking ahead to see how the coming year might be shaping up for investors.
There are a number of key trends that we're watching.
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Chris Hyzy
Chief Investment Officer
Merrill and Bank of America Private Bank
I'm Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank.
We're calling these trends, "5 for '25". Bright spots that could help sustain the current bull market over the next year or longer.
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5 for '25
Top themes for the year ahead
You can explore them in greater depth in the November "Investment Insights" and "Viewpoint" reports from the Chief Investment Office.
[On-screen images of investment reports]
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5 for '25
Top themes for the year ahead
Strong corporate earnings
1.) A wider equity playing field
First, we see U.S. corporate earnings staying strong in 2025 and potentially gaining momentum into 2026.
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5 for '25
Top themes for the year ahead
2.) Ongoing interest rate cuts
Second, while a few technology leaders have dominated recent S&P 500 growth, more companies with improving fundamentals could widen the playing field.
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5 for '25
Top themes for the year ahead
3.) Ongoing interest rate cuts
Third, ongoing Federal Reserve interest rate cuts — albeit more moderately in 2025 — could boost small cap stocks and support a new cycle of mergers and acquisitions among mid-sized companies.
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5 for '25
Top themes for the year ahead
4.) Normalized bond markets
Fourth, the long-inverted yield curve could return to a more normal pattern, with long-term yields rising relative to short-term yields. This could return some normalcy to the bond markets.
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5 for '25
Top themes for the year ahead
5.) Disruptive innovation
And finally, we believe artificial intelligence and other disruptive technologies will boost profit margins, operating leverage and productivity across industries.
These five trends tie into a broader theme we believe will help shape the next decade. We call this the advancement of the "Asset-Light Era."
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The Asset-Light Era
Market-leading companies with:
- Fewer fixed costs for equipment and labor
- Greater flexibility
- More capital to invest
Market-leading companies today tend to have fewer fixed costs relative to things like heavy equipment and labor. That means they have more flexibility to respond to changing conditions, and more capital to invest.
On-screen copy:
Save the date for our Dec. 12
Outlook 2025 webcast:
"Get ready for what's next"
So let's check back frequently for more insights leading up to our "Get ready for what's next" 2025 Outlook webcast, launching on December 12th.
Some of the topics we'll dive into there include:
- The economy, inflation and interest rates
- Post-election market impacts
- Trends in equities and fixed income
- And new ideas to help you manage your portfolio
Be sure to tune in!
On-screen disclaimers:
Important Disclosures
The opinions expressed are as of 11/13/2024 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
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. Stocks of small-cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. Bonds are subject to interest rate, inflation and credit risks. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.
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.").
Merrill makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp. MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.
Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible lo ss of principal investment.
The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC and other affiliated banks.
Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.
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[End of transcript]
In the above video, Hyzy talks about some of the key trends that could sustain our current bull market into the New Year and beyond. For additional insights, be sure to listen to the Outlook 2025 webcast "Get ready for what's next" launching on December 12.