Displaying items by tag: baml

(New York)

BAML’s chief investment office has put out some comments on how to help position ESG for clients. The ESG sector is plagued by misinformation and vagueness which clouds the overall value proposition. Accordingly, the best way to approach it is to have a matter-of-fact conversation to demystify things. According to BAML, “Advisors find clients are generally looking to avoid certain areas depending on their preferences, or because they have found investments score poorly by ESG metrics; favor investments they think will benefit various social or environmental practices; or help contribute to measurable outcomes around such an initiative”. They continued “It's an opportunity to demystify the conversation and also to keep it in a dialogue, because where we find this goes awry is when anyone feels like there's a moral superiority or mandate going on as opposed to a dialogue around your personal preferences”.

FINSUM: It is easy to get lost in the world of things claiming to be ESG. The best way to approach the sector is to be specific (e.g. I want a portfolio without fossil fuels), or at least specifically vague (I only want to invest in companies with high ESG scores).

(New York)

The post-pandemic bull run has touched the breaks, but not necessarily stopped the momentum. However, Bank of America’s Sell Side Indicator…View the full article on our partner Magnifi’s site

(Washington)

Bank of America Merrill Lynch has just published a new survey of institutional money managers and found an interesting sentiment among those managing a hulking mass of American money. That finding is that money managers are much more worried about the election than they are about the trade war. Institutional investors think election worries will have a much greater effect on markets than the trade war will. The chief US economist at Goldman Sachs summarizes the situation this way, saying “While there are no obvious signs of election-related effects on economic activity so far in this election cycle, there is some concern that . . . uncertainty could have a more noticeable effect on sentiment and activity as the election approaches”.

FINSUM: We absolutely agree. The trade war seems to be cooling as both sides appear as though they want to hash out the issues. The election is an event with potentially hugely variant outcomes and it is highly difficult to predict. This all means it is hard to price, and that uncertainty can weigh on companies and markets.

(New York)

Wall Street analysts area all over the map about where stocks are headed next year. Some firms are bearish (Morgan Stanley), some are neutral, and some are bullish. Put Bank of America in the latter category, as the bank says that stocks are set to surge in the first couple months of 2020. Calling the year “front-loaded”, Bank of America analysts say that the S&P 500 should rise by 5.2% by March 3rd. Michael Hartnett from BAML says that the combination of easing trade worries, diminished Brexit fears, and loose monetary policy should combine to cause a “melt-up” in risk assets.

FINSUM: We like this call. All the fears for the winter seemed to have ebbed, and there will be a few months before election worries really kick in.

(New York)

Bank of America has just made a bold call on the direction of yields. The bank has sharply increased its forecasts for where bond yields will be at the end of the year. Its previous forecast for the ten-year was 1.25%, but it has just moved that up to 2%. It made similar adjustments to its forecast for German and British bonds. “Relative to our more pessimistic revision in August, the US and China are working to de-escalate trade tensions, no-deal Brexit risks have been banished for now, global data have started to stabilize, and central banks have shifted from dovish to neutral policy stances”.

FINSUM: Based on the change in mood amongst investors and central banks, this forecasted change makes total sense to us.