bank of america merrill lynch 2019 outlook

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Technology Trends – Charting the 2019 Outlook

The US Economy and Its Impact on the Technology Sector

For the most part, 2018 was a solid year for the American economy with its gears grinding on most of its cylinders. The spending of consumers increased and companies had more investments. But the year 2019 may offer a slowing down of this growth according to expert analysis of economists.

The Bureau of Economic Statistics recorded a growing pace of 3.5% for the US gross domestic product (GDP) of the US in the third quarter of 2018. This rose to 4.2% during the fourth quarter.

Yet these inspiring numbers may not be sustainable for 2019. Goldman released their prediction that the GDP may decline by 1.8% this coming third quarter of 2019 and may continue to plummet to 1.6% during the fourth quarter of 2019.

Experts believe the positive growth of 2018 was a direct result of tax cuts in 2017. For this fiscal year, Goldman expects a tightening of financial conditions.

However, the outlook is not entirely dim. There is just a balance of caution and optimism for 2019. The American economy may slow down but it will not yet enter recession this year. There is also an enduring belief that the technology industry will continue to play a pivotal role in keeping the economy afloat and alive.

The US Economy: Crunching the Numbers

Reuters conducted a survey of economists about the possibility of a recession in the US for 2019 and most responded that the probability is low at 35%. But the forecasts are not overly optimistic either. Several economic and political factors have been identified as challenges for the US economy.

These include the continuous rise of interest rates, difficulties in controlling borrowing costs for consumers, and more trade tariffs by virtue of President Donald Trump’s aggressive trade policies.

Moreover, the global economy is not as energetic too. The Organization for Economic Cooperation and Development provided a lower forecast for the economy of the entire world from 3.5% – down a few notches from its earlier forecast of 3.7%. The thinktank believes that the prospects of global expansion has reached its peak and may likely slowdown in the next two years.

In a separate assessment, Bank of America Merrill Lynch had a survey of fund managers. 44% of them expressed insights that global growth will slow down in 2019.

Some of the global events that have been contributing to this uninspired forecast include the continuing Brexit trade wars, the tension between Italy and the European Union, more US sanctions for Iran and shaky stock markets, to mention a few.

But there is still light at the end of the tunnel for the American economy.

The US has the world’s largest economy and it has strengthened further with the creation of more jobs. Most of these employment opportunities emerged from the dominance of its technology sector.

The Tech Titans of America: Heavy Lifters of the US Economy

The tech sector continues to be a bright spot for the American economy.

Even when the Trump Administration hasn’t delivered yet on some of its promises such as the deregulation of the financial sector and tax reforms, the stock market hasn’t come to a screeching halt.

Most experts give credit to the strong performance of tech giants such as Apple, Alphabet (the parent company of Google), Facebook, and Amazon.

They comprise 37% of the total market gains of America presently.

Wall Street experts fondly call these tech giants GAFA or Google, Amazon, Facebook and Apple. James Pethokoukis has this to say about GAFA in his opinion piece “Leave Silicon Valley Alone” from theweek.com:

“Google, Amazon, Facebook, and Apple — what Wall Street calls GAFA — are four of America’s most valuable and important companies, providing a massive benefit to consumers. Collectively they’re the Tony Stark of corporate America: They pay for everything, design everything, and make everyone look cooler. If the U.S. is going to remain the world’s technological leader against China’s challenge, GAFA will be pivotal.”

The Economist noted that ten years ago, the five largest spenders of America were bastions of traditional businesses such as AT&T, Chevron, ExxonMobil, General Electric and Verizon.

Now the top five are Alphabet, Amazon, Apple, Intel, and Microsoft – all tech giants.

They accounted for 80% of America’s advanced industries from 2015 to 2017

These tech companies have smartly reinvested 50% of their total gross cash-flow towards productive projects such as properties, plants, and equipment.

For example, Alphabet is redeveloping Chelsea Market in New York while also funding vital data centers.

Amazon is creating e-commerce fulfillment centers to remain in the lead as far as online market activity is concerned.

Semiconductor firms are expanding productions to help out sustainable technologies such as machine learning and autonomous (self-driving) cars.

Most tech giants are also improving access to cloud computing capacity. This has made it easier for other industries to be more efficient in their data handling and storage needs.

Cloud Computing and Data Management Solutions

Among the strongest suits of the digital sector is the emergence of technologies that focus on efficiency: cloud computing and data management systems.

Cloud computing remains one of the budding technologies with a strong grip in the market. This technology focuses on the collection and storage of big data and information security.

Data management systems have also become vital to ensure that data can be accessed uniformly, systematically and efficiently across various platforms.

These breakthroughs have become useful and integral to other non-tech companies. Other industries have been using these technologies such as health care, transportation, education, energy, entertainment, communications, finance, and professional services.

Tech titans keep finding ways to integrate itself as a need, in various sectors. Take for example Google’s efforts to focus on education by making it easier to transmit information, documents and other deliverables online with the help of Google platforms such as Gmail and Google Drive.

Mobile operating systems have basically become a two-way race between Apple and Alphabet.

Facebook and Google comprise three-quarters of the digital advertising industry in 2016.

The tech giants have become the centers of gravity for the American economy. Cloud computing and data management systems have created a lot of employment opportunities and earning potential in America. Even with the unpredictability of economic policies and even politics, IT-related companies have a sustainable path to revenues.

According to Cyberstates 2018, there is an expected rise of 13 percent in computer and IT-related jobs between 2016 to 2018. Among all other occupations in the US, this is the fastest rate so far.

The tech boom has also become a benefit for non-tech companies which provide a wide range of services and products.

Examples of these are FedEx and UPS which have been improving their e-commerce capabilities by purchasing airplanes and creating more depots.

The emergence of cloud storage and data management systems has also increased the demand for peripherals such as server racks, wall mounts, and cable managers for databases.

Politics and the Tech Sector

Remarkably, one of the biggest challenges of the tech industry has nothing to do with technological limitations. The point of contention so far is politics and policies.

The ongoing trade tension between Washington and Beijing has created frosty relationships and potential deadlocks when it comes to emerging technologies and supplies of spare parts.

Trump has recently put tariffs amounting to $250 Billion of Chinese products, including tech goods.

Washington has put out threats that they will enforce export controls on a wide range of digital breakthroughs developed by American tech titans.

Google, Facebook, Intel, Amazon, and NVIDIA have so far created significant milestones and strides when it comes to these new technologies:

  • Machine learning and neural networks
  • Computer vision
  • Artificial intelligence
  • Cloud services Dedicated chipsets
  • Autonomous vehicles
  • Augmented and virtual reality

The US government is citing national security grounds as reasons for these export controls. They believe that China is stealing intellectual property rights of American tech titans using predatory and unfair means.

The hope is by enforcing export controls, it will be difficult for China to have access to these breakthrough technologies.

But if these technologies are withheld or hidden, it doesn’t necessarily mean China will never have access. Most tech analysts believe that China has moved on from stealing and they are also competitive in their own innovations.

Moreover, these scientific breakthroughs are also available in academic circles. There is nothing that is stopping China from accessing these technologies using academic sources.

Analysts believe that other countries may develop the same technology that America will be hiding or withholding, and sell their own versions. It can potentially lead to significant revenue losses for US companies.

In the long run, it can compromise the considerable lead of American tech titans in the digital sector that they have worked hard to build.

Ed Black, chief executive of the Computer and Communications Industry Association has this to say:

“It does not seem to me like it is a well-thought-out game plan. The gap between . . . what [the administration] would like to do and what they can reasonably accomplish is potentially very large. That, I think, is an indication that they have yet to fully develop a strategic or tactical approach.”

As far as production of parts and peripherals is concerned, on the other hand, it can be an opportunity for American companies to rely more on internal capabilities and further improve the production of spare parts and other IT-related peripherals.

Rocky Relationship with the White House

It’s not only with China. President Donald Trump also doesn’t have the most ideal relationship with American tech companies – even though it has been well-established that the economic dominance of the US globally is largely powered by its tech titans.

Recently, Washington has imposed immigration limits for tech companies. This would severely hamper the performance of companies who rely on the H-1B visa program that allows them to hire highly skilled workers from overseas.

Trump’s ongoing trade war with China also has serious implications on gadget makers, especially small startups for hardware. The supply of spare parts abroad may experience difficulties. This may lead to the transfer of the burden to consumers through higher retail prices.

Upward Trajectory for the IT Sector

Despite the challenges they are facing in the economic and political climate, the outlook for tech companies is very optimistic this 2019.

Silicon Valley in the southern Bay Area of Northern California remains the iconic core of tech companies. Analysts hope tech companies will keep branching out further into the Heartland to gain more momentum for the industry and to provide more jobs.

Tech titans Amazon, Google, and Apple have started offering high-level posts away from the typical hubs of Seattle and the Bay Area.

Tech companies are putting a premium on finding talent in various parts of America.

The success of the tech boom is not limited to Silicon Valley. The outlook is trending upwards for the entire country. In 22 states, tech companies rank among the top five economic contributors.

Information Technology Job Sector Growth Chart

Data from Brookings from 2015 to 2017 show that there have been massive IT growth in areas outside of Silicon Valley. Consider the following:

Wichita, Kansas: 552 jobs, 18.9% change
Lakeland-Winter Haven, Florida: 196 jobs, 15.4% change
Chattanooga, Tennessee-Georgia: 285 jobs, 11.6% change
Boise City, Idaho: 785 jobs, 11.6% change

The established IT hubs have also strengthened their base. Most new tech jobs are still offered in markets that are already focused on technology:

• San Francisco
• Seattle
• San Jose
• Los Angeles
• Austin

Tech Titans and the Cloud

The leading IT companies have put an emphasis on cloud computing, data management systems and other emerging technologies. This has opened highways of revenue potential for tech and non-tech companies that are providing related products and services.

With the tech titans in the lead, the economic outlook for the entire IT sector is sustainable and encouraging.

Google has a good stake in the cloud industry sweepstakes. With their free platforms, they have created a higher demand for data storage, higher resolutions for images and larger sizes for files. Google is in a good position to respond to more data demand in the future.

Alphabet, the parent company of Google, has also invested in Waymo, a unit for autonomous transportation that focuses on robo-taxi services. Going into the future, it has a valuation of $175 billion and can increase further as data management for this technology continues to progress.

Apple, on the other hand, had a relatively lost year for 2018. While it received a year-high 25% growth in 2018, investors eventually felt the momentum slowed down along with the decline of iPhone sales in the last months of 2018.

Daniel Ives, an analyst from Wedbush Securities, mention two critical factors in the down year of Apple: the slowdown in iPhone sales and the lack of transparency for investors.

But thankfully like other tech titans, Apple is not a one trick pony. 5G technology is set to arrive in late 2019 and Apple is in a good position to capitalize on it. With this, investors may expect positive growth for Apple’s stock in the latter months of 2019.

Another technology that Apple can bank on is the possibility of releasing a video service that will go head to head with Netflix and Amazon Prime Video. The anticipated increase in Apple’s needs for data management can only bode well for the future of the IT sector.

As for the software industry, there is a growing dependence on big data management and cloud storage. It is also encouraging to note that the sector has created 10.5 million jobs in America across all 50 states – a strong indication that the sector is here to stay.

Because of this impact, the software industry accounts for $1.14 trillion of the US Gross Domestic Product (GDP). Software companies also find ways to keep this sustainable and thus they have devoted $63.1 billion for research and development.

Enduring Economic Challenges for a Stable and Sustainable 2019

Despite challenges, tech companies will keep on grinding like clockwork and producing outputs at a high clip.

The key to all of this is innovation. The tech titans of America continue to have access to breakthrough technologies that change the way the world does its business.

And while there will be hiccups along the way, technology and innovation are like freight trains that are hard to stop, especially when the world embraces their ways and means.

This is what happened when Google became a household name as an online search engine. Or how Facebook evolved from a college project to the primary energy behind social media. Or Apple’s prototypes that projected smartphones as a need and not as a luxury.

The tech sector will continue to blaze trails not only for America but also the entire world. It will open several gateways to more productivity and jobs.

Currently, most private sector jobs are provided by companies that have been created less than five years old. These are companies that are powered by innovation and technology, currently employing over 6.7 million people and bringing back more work in the US.

It significantly decreases the need to outsource jobs.

The automation of several non-tech industries has also increased the productivity and efficiency of the US economy. These have caused lower prices and higher demands, which in turn causes more employment opportunities for Americans.

The future is still bright for the tech titans of America. It is already unstoppable now, and it can only gain more momentum in the future. If there is a force that can make America great again, look no further than Silicon Valley to take the lead. Innovation is at the heart of it all.

There was a time when technology was just an exciting possibility: a door that can open multiple gateways, a prospect that can lead to diversionary fun and games.

But times have changed. Technology is now the game. Technology is now.

Digital breakthroughs can change the landscape of the world with the touch of a fingertip. There is barely any time to catch up on the latest trends.

But idly wink, and it can lead to significant financial losses or a plunge to irrelevance if a company doesn’t pay attention. It’s keep up or pay the price.

Cradled in Silicon Valley, the leading technological titans of America have wasted no time sprinting ahead of the competition in their respective industries. The world has followed their leads.

Even with the unpredictability of government interventions and market forces, the tech titans of America are safe. They ensure the stability of the entire IT sector for 2019 and beyond.

A thriving innovation ecosystem, in turn, will provide smarter opportunities for growing our economy, protecting the environment, boosting education, and improving public safety.” – Chris Hopfensperger, executive director of Software.org.

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Technology Trends - Charting the 2019 Outlook - RackSolutions

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Technology Trends - Charting the 2019 Outlook - RackSolutions

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American economy may slow down but there is an enduring belief that the technology industry will play a pivotal role in keeping the economy afloat.

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Fabio Cuffaro

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RackSolutions

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RackSolutions
Источник: https://www.racksolutions.com/news/blog/technology-trends-2019-outlook/

Michaels' stock tumbles after BofA Merrill Lynch turns bearish, citing potential sales outlook cut

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Shares Michaels Companies Inc. MIK, tumbled 7.7% to pace the retail sector's decliners, after Bank of America Merrill Lynch turned bearish, citing potentially long-term struggles that are "unlikely to resolve" until a new CEO is named. The company had announced in February that then-CEO Chuck Rubin was agreed to step down after six years in charge. Analyst Elizabeth Suzuki cut her rating to underperform from neutral, while slashing her price target to $5, which is 35% below current levels, from $9. She said a proprietary survey of over 2,000 U.S. consumers has provided some insight into the "opaque" arts and crafts retail sector, suggesting the sector has struggled with "a lack of compelling trends" and an increase in competition. As the only publicly traded "pure-play" arts and crafts retailer, Suzuki expects Michaels to cut its full-year outlook for same-store sales, after the company has been reporting decelerating sales but recently maintained its full-year outlook. "[Michaels's] expectation for a [second-half] rebound appears overly optimistic, in our view, and we expect guidance to be lowered in the upcoming quarters," Suzuki wrote in a note to clients. The stock, which was the biggest decliner in the SPDR S&P Retail ETF XRT, has lost 43% year to date, while the retail ETF has gained 3.7% and the S&P 500 SPX, has rallied 20%.

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Источник: https://www.marketwatch.com/story/michaels-stock-tumbles-after-bofa-merrill-lynch-turns-bearish-citing-potential-sales-outlook-cut-2019-07-19

Robert N. Hardwick CFP®

“We have two classes of forecasters: Those who don’t know – and those who don’t know they don’t know.”

 John Kenneth Galbraith

2019 should serve as another reminder that investors should expect the unexpected from the market. It should also, again, call into question the utility of stock market forecasting. 

The best summation of 2019 seems to be that it was the opposite of 2018. 

As we recall, 2018 started with Wall Street forecasting +9% returns for the S&P 500, with dividends reinvested(1). Instead, it finished -4.4%, punctuated by a -20% price decline to close out the year(2). The market seemed generally concerned that Fed policy was too tight and the trade war too violent(3). 

2019 erased those concerns. The Fed got the message(4) while the US and Chinese governments decided to stop throwing sand and play nicer(5). In my view, reversing these headwinds was a big reason the S&P 500 rose +31.49% in 2019. 

Where was Wall Street in forecasting this reversal? 

The average estimate was +21.4% for 2019, with dividends reinvested. While directionally accurate, it’s less impressive when you consider that it missed by 32.04% and that Wall Street Strategists haven’t collectively forecasted a down year for the past 20 years(6). And their up-year forecasts have missed by wide margins in the past as well(7).  

This brings us to this 2020. The Street is calling for an average gain of +3.43%(8). The range is -7.25% to +8.23%.  So all-in, they think it’ll be a benign year.  

Who wants to bet real money they’re right this time? 

Before you wager, remember your chances of being right about as good as the chimps who throw darts for research purposes(9). 

The best thing to do when someone sends you a 2020 stock market forecast is to throw it in your fireplace. Then, remind yourself of the historical data and that those thoughtful year-end forecasts are just marketing tools to stay in the press during the holiday slow period. They shouldn’t have much, if any, impact on your long-term financial outcomes.

Instead of starting your year asking what’s the market going to do, ask yourself: “what do I need from the market? And from my overall portfolio?” 

As a result, more relevant topics should surface, such as:

  • How much income will I need once I’m done working and am I on track to safely achieve it?
  • What is an appropriate amount to leave behind to future generations? 
  • Will those assets be distributed tax-efficiently?
  • Do I have a tax-efficient source of money to pay future healthcare expenses?
  • Is my portfolio taking too much, or too little, risk? 
  • What is the appropriate way to measure risk?
  • The list goes on…

Once you have a handle on these issues, you’ll know what your future liabilities should be and as a result, you’ll be better informed to allocate your portfolio. 

However, if your top priority is to just get more aggressive this year, you may be dealing with a case of FOMO (Fear of Missing Out) based on last year’s market performance. This is normal. Investors expectations of next year’s returns are typically informed by the prior year’s performance(10). Moreover, as we all move farther away from the 2008 financial crisis, our collective financial-PTSD(11, 12, 13) fades a bit more. So ever year that goes by post-crisis, we are a bit more likely to get more aggressive than last year. Provided the past year’s returns were positive, of course. 

So, instead of acting on an impulse that tells us to get aggressive at the start of the year, a better exercise would be to do the following:

  1. Confirm your risk profile, including if you’re unnecessarily seeking or avoiding risk
  2. Make sure your portfolio allocations are consistent with your long-term funding objectives
  3. Do nothing – if the first two suggestions check out. 

The rest is details. And yes, there are plenty to consider. And they are important. However, before you start going down the path of Roth vs. Traditional, HSA or not, or which of your awesome company benefits to leverage, confirm the big picture is nailed down. 

Otherwise, all that time in the weeds might be a waste if the market decides to throw a curve-ball that you’re not prepared for. 

And after all, when was the last time that happened?

Sources/Further Reading:

  1. Lucinda Shen, Will the Stock Market Crash in 2018? Here’s what Wall Street Predicts; Fortune Magazine, December 28, 2017
  2. S&P Dow Jones Indices; S&P 500 Fact Sheet, December 31, 2019
  3. Sarah Ponczeik, Vildana Hajric & Luke Kawa; U.S. Stocks Battered by Trade,Yield Concerns: Markets Wrap; Bloomberg; December 3, 2018
  4. Patti Domm; Powell aces tricky Fed transition to ending interest rate cuts, doing “100% of the right things”; CNBC; October 30, 2019
  5. Bloomberg News; U.S. Says Phase-One China Deal Would Include Tariff Rollback; November 6, 2019
  6. Jeff Sommer; Wall Street’s Annual Stock Forecasts: Bullish and Often Wrong; New York Times, December 6, 2016
  7. Jeff Sommer; Forget Stock Market Forecasts. They’re Less Than Worthless.; New York Times, December 23, 2019  
  8. CNBC Market Strategist Surgery; 2020
  9. Rick Ferri; Any Monkey Can Beat the Market; Forbes; December 20, 2012
  10. Hannes Mohrschladt; The Impact of Recency Effects on Stock Market Prices; University of Munster; November 21, 2018
  11. Bradley T. Klontz, PsyD., CFP and Sonya L. Britt, Ph.D., CFP, Financial Trauma: Why the Abandonment of Buy-and-Hold in favor of Tractical Asset Management May be a Symptom of Posttraumatic Stress; Journal of Financial Therapy – Volume 3, Issue 2, 2012
  12. Jack Singer; Dr. Jack’s Advice for Advisors: Recognizing PTSD Among Advisors; Financial Advisor Magazine; September 2, 2014
  13. Nicola Mucci, Gabriele Giorgi, and Giulio Arcangeli; The Correlation Between Stress and Economic Crisis: A Systematic Review; Neuropsychiatric Disease and Treatment; Dove Press; April 21, 2016 
Источник: https://perigonwealth.com/outlook-2020-what-to-watch-for-and-what-to-avoid/

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BOFA SECURITIES, INC. – FURTHER INFORMATION

"Bank of America Merrill Lynch" is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., all of which are registered as broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed.

© 2021 Bank of America Corporation.

Источник: https://business.bofa.com/en-us/content/market-strategies-insights.html

Weapon Systems

  • Presentation

    Navy Shipbuilding: Searching for a Path to a Larger and More Distributed Fleet

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, to the American Shipbuilding Suppliers Association.

  • Presentation

    The Capacity of the Navy’s Shipyards to Maintain Its Submarines

    Presentation by R. Derek Trunkey and Eric J. Labs, analysts in CBO's National Security Division, at the Annual Conference of the Western Economic Association International.

  • Presentation

    Shipbuilding and Expeditionary Warfare Operations

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, at the 2021 Virtual Expeditionary Warfare Conference.

  • Presentation

    Navy Shipbuilding: Prospects for Building a Larger Fleet

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, at the Surface Navy Association’s 33rd Annual Symposium.

  • Presentation

    The 2021 Outlook for Navy Shipbuilding: Prospects and Challenges in Building a Larger Fleet

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, at the Bank of America Merrill Lynch 2021 Defense Outlook and Commercial Aerospace Forum.

  • Presentation

    The Cost of Replacing Today’s Naval Aviation Fleets

    On June 27, 2020, R. Derek Trunkey, David Arthur, Edward G. Keating, and John Kerman (of CBO’s National Security Division) presented at the Annual Conference of the Western Economic Association International.

  • Presentation

    The 2020 Outlook for Navy Shipbuilding

    Presentation by Eric Labs, a senior analyst for naval forces and weapons in CBO’s National Security Division, at the Bank of America Merrill Lynch Defense Outlook Forum.

  • Presentation

    Prospects for DoD’s Acquisition Budget Over the Next Decade

    Presentation by David Mosher, CBO’s Assistant Director for National Security, at the Professional Services Council’s Vision Conference 2019.

  • Presentation

    The Navy’s Amphibious Warfare Force: Change Under Fiscal Constraints

    Presentation by Eric Labs, a senior analyst for naval forces and weapons in CBO’s National Security Division, at the National Defense Industrial Association’s 24th Annual Expeditionary Warfare Conference.

  • Presentation

    Funding Implications of Impending Retirements of Air Force Aircraft

    On Saturday, June 29, Adebayo Adedeji, an analyst in CBO’s National Security Division, presented at the Annual Conference of the Western Economic Association International.

Источник: https://www.cbo.gov/taxonomy/term/56/latest?type=5&page=0

Bank of america merrill lynch 2019 outlook -

Michaels' stock tumbles after BofA Merrill Lynch turns bearish, citing potential sales outlook cut

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Shares Michaels Companies Inc. MIK, tumbled 7.7% to pace the retail sector's decliners, after Bank of America Merrill Lynch turned bearish, citing potentially long-term struggles that are "unlikely to resolve" until a new CEO is named. The company had announced in February that then-CEO Chuck Rubin was agreed to step down after six years in charge. Analyst Elizabeth Suzuki cut her rating to underperform from neutral, while slashing her price target to $5, which is 35% below current levels, from $9. She said a proprietary survey of over 2,000 U.S. consumers has provided some insight into the "opaque" arts and crafts retail sector, suggesting the sector has struggled with "a lack of compelling trends" and an increase in competition. As the only publicly traded "pure-play" arts and crafts retailer, Suzuki expects Michaels to cut its full-year outlook for same-store sales, after the company has been reporting decelerating sales but recently maintained its full-year outlook. "[Michaels's] expectation for a [second-half] rebound appears overly optimistic, in our view, and we expect guidance to be lowered in the upcoming quarters," Suzuki wrote in a note to clients. The stock, which was the biggest decliner in the SPDR S&P Retail ETF XRT, has lost 43% year to date, while the retail ETF has gained 3.7% and the S&P 500 SPX, has rallied 20%.

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Источник: https://www.marketwatch.com/story/michaels-stock-tumbles-after-bofa-merrill-lynch-turns-bearish-citing-potential-sales-outlook-cut-2019-07-19

Merrill Edge Review

Merrill Edge is a financial platform owned by Bank of America. It offers access to online and advised investing, trading, brokerage, and banking services. Customers can be self-directed, work with advisors, or access portfolio management through Merrill Edge Guided Investing. In recent years, Bank of America has opened 600 new Merrill Edge investment centers (bringing the total to 2,800) and added 300 financial solutions advisors to its stable.

Since launching in 2010, Merrill Edge has offered a convenient way for investors to manage their banking and brokerage needs under one roof. Customers can take advantage of Bank of America'sPreferred Rewards program, which offers discounts like preferred pricing on Merrill Guided Investing accounts and discounts on ATM transactions, auto loan interest rates, and mortgage origination fees. The higher your average daily balance in your Bank of America and Merrill investment accounts, the better the perks—which means there is an incentive for Bank of America customers to open a Merrill Edge account.

Merrill Edge is a solid choice for long-term, DIY investors, especially those who already have a relationship with Bank of America. It's also a good choice for investors who want varying degrees of financial guidance. We'll look at Merrill Edge's features, costs, and resource quality to help you decide if it's the right fit for your investing style. Aside from this Merrill Edge broker review, we've also reviewed the Merrill Edge Guided Investing robo-advisor service.

Key Takeaways

  • Merrill Edge seamlessly connects the investing accounts and with the BoA banking experience.
  • Merrill Edge is cost competitive with $0 online stock and ETF trades with no account minimums.
  • Customers of Merrill Edge and BoA can access discounts and other perks through Bank of America's Preferred Rewards program.
  • Merrill Edge offers excellent fundamental research with proprietary and third-party research and stock ratings.

Who Merrill Edge Is For

Beginner and intermediate DIY investors will be well-served by Merrill Edge's technology and range of services. As an online brokerage, Merrill Edge offers a comprehensive platform with adequate technical and fundamental tools suitable for long-term investors and casual traders. As part of Bank of America's overall financial services universe, Merrill Edge offers perks (through the Preferred Rewards program), a seamless banking/investing experience, a wide variety of educational offerings, and strong in-person support.

Pros
  • Integrated with Bank of America

  • Robust proprietary and third-party research

  • No fees and no minimums for self-directed accounts

Cons
  • Narrow product line-up

  • Limited platform capabilities

  • Two-leg maximum on options strategies

Pros Explained

  • Merrill Edge's deep integration with Bank of America means customers can manage their banking and investing accounts under one roof—enjoying additional perks for doing so.
  • Merrill Edge integrates research from Morningstar and Lipper with its own research team to provide top-notch reports on individual stocks, news, and market commentary.
  • Merrill Edge has no account minimums and unlimited $0 online stock and ETF trades. Clients with at least $20,000 in combined deposit and investment accounts qualify for additional perks through the Preferred Rewards program.

Cons Explained

  • Merrill Edge supports stock, ETF, options, mutual fund, and fixed income trading, but it's missing some of the products that many active traders want, including futures, futures options, forex, and crypto. Investors looking for more advanced trading opportunities won't find them here. 
  • The Merrill Edge platform is suitable for casual DIY investors and traders. However, the lack of advanced order types and direct market routing—combined with a slow order entry interface—make it less suitable for active traders.
  • Options strategies on Merrill Edge are limited to two legs (many brokers offer at least four). The company states it will support four-leg strategies in 2021. 

Usability

It's simple to get started on Merrill Edge, especially if you're already a Bank of America customer. After logging on to the Merrill Edge website, you can view your account balances, portfolio performance, and market updates. Five tabs across the top of the screen—Accounts, Trade, Research, Guidance & Retirement, and Help & Settings—make it easy to find tools and resources. From the Trade tab, you can launch the MarketPro platform, which is available to all clients regardless of account size or activity. While the website isn't customizable, you can customize the layout and set trading defaults in MarketPro.

MarketPro and the Merrill Edge mobile app (available for Android and iOS) provide streaming real-time quotes and news, which you can view on multiple devices simultaneously. The app supports the same order types and, except for fixed income, the same asset classes as MarketPro. You can monitor, manage, and create new watchlists on the app and share them between the web and mobile app. However, MarketPro watchlists are saved to your local device instead of the cloud. Charting and research are available on both MarketPro and the app, and you can overlay a variety of technical indicators and drawing tools on either platform.

Trade Experience

The trading experience across Merrill Edge's platforms is straightforward and intuitive. MarketPro offers a decent amount of customization options, including color schemes, font size, layouts, alerts, trade defaults, and hotkeys. MarketPro users can right-click the chart and choose “buy” or “sell” at the current price. Web and mobile users can click the “Trade” icon in the chart header, which prefills the order ticket with the symbol information. Overall, our review found the MarketPro chart trading interface less elegant than what you may find on some other trading platforms. Still, it gets the job done, especially for retail traders with less complex needs.

MarketPro and mobile provide streaming real-time quotes, which you can view on multiple devices simultaneously. You can stage orders for later entry and enter multiple orders simultaneously. 

Mobile Trade Experience

You can't customize many features on the Merrill Edge mobile app. Still, it's well-designed and has most of the tools and resources you'll find on the desktop platform. The app doesn't support chart trading, but you can click the “Trade” icon in the chart header, which prefills the order ticket with the symbol information. Unlike MarketPro, you can't stage orders for later entry or enter multiple orders simultaneously on the app. You can filter which news feeds are displayed in the app just as you can online. As previously mentioned, watchlists created through the web platform are synced to the mobile app, but MarketPro watchlists are only on the computer running it.

Range of Offerings

Merrill Edge customers can trade stocks, ETFs, options, mini options, weekly options, binary options (new), mutual funds, CDs, Treasuries, municipal bonds, and corporate bonds. App traders are limited to stocks, ETFs, options, and mutual funds. Merrill Edge does not offer futures, futures options, forex, or cryptocurrency trading. Some international transactions can be made with the help of a live broker. Investors can trade the following with Merrill Edge, both on the website and MarketPro:

  • Stocks long and short. Merrill Edge's stock borrow process is fully automated for all short sale locates. It includes securities that have historically been on ETB lists and many others, and it can provide an instant locate when inventory is available.
  • OTCBB (penny stocks). There are certain restrictions in place that could limit OTCBB transactions based on market cap. 
  • Mutual funds (about 3,100 no-load, no transaction fee).
  • Bonds: corporate, municipal, treasury, CDs.
  • Single leg and two-leg options (with plans to introduce four-leg strategies in early 2021).
  • Robo-advisory integrated into the website and mobile app.
  • International trades via a live broker.

Order Types

Merrill Edge supports basic order types (e.g., market, limit, stop limit, trailing stop) across all platforms, but it doesn't offer the advanced conditional orders that active traders want. If you've been buying into a stock over time, you can choose the tax lot when you close part of the position—or you can set an account-wide default for the tax lot choice (such as average cost, last-in-first-out, etc.).

Trading Technology

Merrill Edge uses the Bank of America Merrill Lynch (BofAML) smart order router. The smart order router looks for displayed and reserve liquidity at hidden and visible venues at each price level up to the order's limit price. If an order becomes unmarketable, the router posts any residual quantity across multiple venues and redistributes residual posted share quantities dynamically as executions occur. Essentially the technology is approaching the process of filling an order by first seeking price improvement rather than execution speed. Merrill reports that 98.38% of orders are executed at better than the quoted price and the average execution speed is 0.018 seconds. Merrill Edge does not accept payment for order flow from market makers.

Despite boasting an advanced order router, Merrill Edge is limited beyond that. The broker doesn't support any simulated trading, backtesting, or automated trading capabilities.

Costs

Many brokers have shifted to commission-free trading stock and ETF trading, and Merrill Edge is no exception. It moved to $0 online stock and ETF trades in Oct. 2019. Otherwise, its fees are in line with the industry.

  • $0 commissions for online equity, ETF, and OTCBB trades. 
  • There is no per-leg commission on options trades. Per-contract commissions are $0.65. 
  • An order for 50 options contracts is $32.50. 
  • A covered call trade of 500 shares plus five contracts costs $3.25. 
  • Mutual fund trades for funds outside the No Transaction Fee program cost $19.95. 
  • Fixed income trades for secondary issues are $1 per bond. 
  • Margin interest ranges from 8.625% for a $10,000 balance to 7.5% for balances between $25,000 and $99,999 (as of September 2021). Rates for balance tiers $100k and above are not disclosed on the website.
  • No fees for inactivity, receiving wires, sending checks, or paper statements and trade confirmations. 
  • Sending a wire is $24.95 (domestic and international)
  • There is a $49.95 fee for fully transferring an account out. No fee for partial transfers.
  • Account closure fee is $49.95 for retirement accounts.
  • Broker-assisted trades are $29.95 per trade.

How This Broker Makes Money From You and for You

With fewer brokerages charging commissions these days, it's less obvious how they stay in business. Here are some of the behind-the-scenes ways Merrill Edge makes money from you—and for you.

  • Interest on cash: Merrill Edge makes money on the difference between what it pays you and what it can earn on your cash balances. You can opt for a bank deposit account or a money market account for your cash. It's automatically swept to earn an interest rate at least half of the Federal Funds rate. If you don't choose, you'll earn 0.01% on your cash balances.
  • Stock loan program: Merrill Edge earns money by loaning the stocks in your account for short sales. It does not share that revenue with you.
  • Payment for order flow: Merrill Edge does not accept payment for order flow (PFOF) from third-party market makers.
  • Price improvement: Merrill Edge's smart order router looks for quality trade executions. Customers achieve, on average, price improvement of $0.66 on orders of one to 99 shares, $3.98 on 100 to 499 shares, $11.51 on 499 to 1,999 shares, $19.95 on 2,000 to 4,999 shares, and $24.41 on 5,000 to 9,999 shares. For options, the net price improvement per contract is $0.084.
  • Portfolio margining: Merrill Edge does not offer portfolio margining, which can lower how much margin you need based on overall risk. In general, portfolio margining works best for customers who trade derivatives that offset the risk of their equity positions.

Account and Research Amenities

Merrill Edge has excellent fundamental research tools, including an impressive collection of proprietary and third-party research and stock rankings.

Stock Screener

Merrill Edge has a solid stock screener available on the "Research/Stocks" page. There are 29 prebuilt screeners—such as "Warren Buffett Stocks" and "Cash Cows"—or you can create your own using metrics like price, sector/industry, exchange, index, dividend yield, P/E ratio, market cap, and institutional ownership. Technical screeners are provided by Recognia, and you can save any screener to use later.

ETF Screener

There are two proprietary ETF screeners on the "Research/ETFs" page. You can search by product type, type of underlying investments, Morningstar rating, leverage/inverse, family, premium/discount, socially responsible, market cap, price, equity sector, performance, risk and portfolio assets, turnover, dividend, expense ratio, dividend yield, and management fees. Merrill Edge Select ETFs is a simplified screener with most criteria selected by Investment Management & Guidance Group of Merrill Lynch. Choose between “Domestic Equity”, “International Equity”, “Taxable or Non-Taxable Fixed Income”, and “Miscellaneous Fixed Income” groups to view matching funds.

Mutual Fund Screener

The "Research/Mutual Funds" page offers several easy-to-use screeners and information about available funds. No transaction fee (NTF) funds are clearly labeled as such, and the screeners include Morningstar and Lipper ratings, among other criteria. The Fund Story, introduced in 2019, helps you quickly evaluate mutual funds and ETFs, including holdings, costs, and ratings.

Options Screener

The “Research/Options” page has a screener where you can filter by basic option features or security fundamentals—or more advanced criteria like option value and volatility. Use the options strategy builder to find strategies that match your risk tolerance, outlook, and goals for symbols in your portfolio and watchlists. Merrill Edge's options chains let you search available contracts for specific optionable securities.

Fixed Income Screener

The “Research/Fixed Income” page includes a screener to filter bonds by type, industry, maturity date, price, yield, YTW, S&P rating, Moody rating, call info, and coupon rate. The Merrill Edge Select Funds tool screens five categories of funds, including “Domestic Equity”, “International Equity”, “Taxable Fixed Income”, “Non-Taxable Fixed Income”, and “International Fixed Income”. The interface is clunky compared to some of Merrill Edge's other screeners, but it gets the job done. 

Tools and Calculators 

Merrill Edge offers more than 24 tools and calculators for personal finance, retirement, college planning, and investing needs. Examples include the “Roth IRA Conversion Calculator”, “Asset Allocator”, “Portfolio X-Ray”, and “Estate Tax Calculator”.

Trading Idea Generator 

Merrill Edge launched Idea Builder in August 2020. It lets you search for investment opportunities by ideas instead of traditional metrics like performance, sector, or individual companies. There are dozens of ideas—such as “Target Date Funds”, “Big Data”, “Millennials + Gen Z”, “Warren Buffett Stocks”, and “Climate Change Vulnerability”. The underlying research has been available on Merrill Edge for years, but Idea Builder combines it into a visual and personalized experience.

News 

Merrill Edge provides news from more than 30 sources, including Associated Press, BBC Newsfile, Boston Globe, Briefing.com, Business Wire, Canada Newswire, Chicago Tribune, Dow Jones, The Economist, Globe Newswire, Information Week, The Guardian U.K., Investor's Business Daily, Marketwired, The New York Times, Wall Street Journal, and the Xinhua News Agency. You can filter the news stream by holdings, watchlists, and preferred news outlets.

Third-Party Research

Merrill Edge has a searchable database on its website for six months' worth of analyst reports on about 1,500 equities. If you're a bond investor, you can read Municipals Weekly and the quarterly Fixed Income Digest. You'll find information about individual equities in the Stock Story feature, which pulls in data from dozens of sources. There is an emphasis on impact investing with MSCI environmental, social, and governance (ESG) scores on stock pages and in Stock Story, and Fund Story takes a similar look at mutual funds.

Charting

Merrill Edge MarketPro has full charting and customization capabilities with streaming real-time data. Choose from bar, line, OHLC, mountain, area plot, and candlestick charts, and a variety of tick and time-based charting intervals. There are more than 70 technical studies, all with customizable study parameters, and you have access to market depth data (Level II, open book, total view, ARCA, and TSX book).  The web and mobile platforms have limited charting capabilities but enough features for casual, long-term investors to trade on the go.

Cash Management

Merrill Edge allows you to enroll in a cash sweep program where your idle cash is automatically moved to a money market fund. If you don't choose to enroll, you'll earn 0.01% on your cash balances.

Dividend Reinvestment Plan (DRIP)

Merrill Edge clients can enroll dividend-paying stocks in a DRIP program.

SRI/ESG Research Amenities

As mentioned, Merrill Edge makes it easy for investors to evaluate their portfolio from a socially responsible investing (SRI) perspective. The MSCI ESG scores appear on stock pages and customers have access to 20,000 ESG ratings and reports and sector organizational displays of every ESG leader across the investing universe. You can view ESG ratings for your portfolios, along with ratings for individual stocks and funds within. 

Portfolio Analysis

Merrill Edge's portfolio analysis capabilities are excellent. Portfolio reports and analysis are available on an overnight basis. Portfolio Story is a proprietary tool that shows a complete breakdown of your portfolio, not only by sectors and holdings but also by performance, analyst ratings, and MSCI ESG scores. It's a valuable piece of portfolio analysis technology and should be especially helpful to new investors. You can isolate option portfolio performance via the Holdings by Product Class view.

Morningstar's Portfolio X-Ray is available on the website. It identifies how your holdings break down across various world regions (and if there is any overlap), shows how your investments are concentrated across 11 different sectors, and explains how your holdings are diversified across asset classes. MarketPro has its own customizable portfolio analysis tool.

Dynamic Insights, which launched in 2020, displays AI-driven insights and analysis on your holdings, accounts, and current market conditions. The reports adapt to portfolio and market changes in real-time. 

Balances, buying power, margin information, and internal rate of return are all updated in real-time. Despite the overall strength of the portfolio analysis tools, there are some gaps. There's no tool to help you figure out the tax impact of a planned trade, and the platforms do not include a trading journal, although you can attach notes to a symbol in your holdings or watchlists.

Education

Merrill Edge's Investor Education center opens with the question: "How do you like to learn?" You can pick an investing experience level (beginner, intermediate, or advanced) or a topic—such as investing & markets, stocks, ETFs, options, mutual funds, margin, and others. From there, you can select your preferred learning format, whether that's articles, videos & webinars, courses, or calculators.

There's also the Merrill Edge Investing Classroom, powered by Morningstar. You can learn about various investment topics through a series of courses that go from basic to more sophisticated strategies. Course examples include “Modern Portfolio Theory”, “20 Stock-Investing Tips”, and “Using Morningstar's Ratings for Stocks”.

Customer Service

  • 24/7 phone line      
  • Online chat    
  • FAQs primarily focused on trading-related information 
  • You can speak with a live broker (there is a surcharge for any trades placed via the broker) and a financial advisor 
  • Non-U.S. residents cannot open an account  

Merrill Edge's phone line is available 24/7 for technical support and trading assistance. Calls start with an automated menu before being routed to a person, and Merrill Edge reports the average hold time is 90 seconds. Merrill Financial Solutions Advisors are available at Bank of America branches in most states for in-person assistance, or you can contact one via phone.

Security and Reliability

  • Biometric entry (fingerprint scanner or face recognition) for mobile devices.
  • Soft token for login and high-risk trade authorization available through text, phone, and email.
  • A device token is offered through the SafePass card for high-risk trade authorization.
  • Excess Securities Investor Protection Corporation (SIPC) insurance provided by Lloyd's of London. There is an aggregate loss limit of $1 billion. 
  • No significant breaches were reported by the Identity Theft Research Center during 2020.
  • Merrill Edge states it had no material platform outages during 2020. It also reports that during the last four years, Bank of America has not experienced any material losses or other material consequences related to technology failure, cyber attacks, or other information or security breaches. 
  • For additional information regarding cyber risks, interested customers can view the disclosure in Bank of America Corporation's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
  • Under the company's Fraud Protection Guarantee, Merrill Edge will reimburse you for "quantifiable monetary losses that occur in any of your Merrill Edge accounts due to unauthorized third-party activity."

Transparency

Merrill Edge's pricing page details self-directed trading fees and commissions, broken down by stocks & ETFs, options, mutual funds, and fixed income & bonds. You'll also find current margin rates, though you have to call for balance tiers $100k and above. If you scroll down, you can find additional fees and services by account type (investing, retirement, and education).

Our Verdict

Merrill Edge is a good choice for long-term investors, especially those who already have an account with Bank of America. The Preferred Rewards program offers discounts and perks that increase with your balance—so you could benefit by having deposit and investment accounts under the same roof. Merrill Edge offers high-quality proprietary and third-party research, a product line-up that should appeal to most investors, helpful customer service, an intuitive trading platform (MarketPro), and a solid mobile app.

Where Merrill Edge falls short is with the active trader crowd. The platform doesn't support advanced order types, you can't backtest or automate strategies, and there's no way to enter trades as fast as active traders would require. Also, the limited investment selection could be a deal-breaker for active traders who want access to futures, futures options, forex, or cryptocurrencies. If you don't need advanced platform capabilities and the product line-up suits your needs, Merrill Edge remains a solid choice as both a brokerage firm and a trading platform.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

Click here to read our full methodology.

Источник: https://www.investopedia.com/merrill-edge-review-4587910

Events

Bank of America Merrill Lynch 2019 Media, Communications & Entertainment Conference

September 11, 2019 at 5:20 PM EDT

This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to financial performance, operating results and strategy. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements in this presentation due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of the Company’s businesses. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the Securities and Exchange Commission (the “SEC”), including the Company’s Registration Statement on Form 10, filed with the SEC and declared effective by the SEC on February 5, 2019, and subsequent Quarterly Reports on Form 10-Q.

Statements in this presentation speak only as of the date they were made, and the Company undertakes no duty to update or release any revisions to any forward-looking statement made in this presentation or to report any events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in the Company’s expectations, except as required by law.

Источник: https://investor.foxcorporation.com/events/event-details/bank-america-merrill-lynch-2019-media-communications-entertainment-conference

2020 Outlook: High Yield Finds Its Sweet Spot in Single Bs

In 2019, rotation to higher quality credit and duration was well rewarded. But so many investors made the move that BB-rated credit now trades at relatively rich levels versus investment grade (IG) credit and the overall high yield index. As a result, and given our expectations of a low-growth, low-inflation environment for 2020 with low yields and low returns, we recommend adjusting credit portfolios to a neutral risk posture and trying to exploit issuer-specific opportunities.

The current market

Against a backdrop of a reasonably supportive macroeconomic environment – slowing growth, but no recession in the US – the fundamentals of the below-investment grade credit markets remain solid. Lower-rated issuance as a proportion of the total continues to fall, declining to less than 10% of the market from about 25% in the pre-crisis period.1 In addition, underwriting discipline has supported relatively healthy issuer practices and there has been a substantial clearing out of lower-rated issuance via a low, and steady, default rate. These factors have helped keep overall stress low and leverage in line with long-term averages, concentrating risk in the lower-ratings tier and in specific sectors.

Even if economic conditions worsen, the high yield market’s strong fundamentals should keep default rates low. A decade of declining interest rates has resulted in credit markets having historically high interest coverage ratios. Relatively lower debt service burdens have resulted in lower default rates, a trend we expect to continue. The default rate for the US high yield market now stands at about 3.5%,2 and defaults have been isolated to specific issuers with high levels of leverage relative to overall enterprise valuation. In fact, the inability to extend debt maturities – not the debt service burden itself – has been the key default trigger in this cycle.

With refinancing issuance over the last several years accounting for more than two-thirds of total issuance, most high yield issuers have managed to push their maturity schedules far into the future at historically low interest costs. Additionally, many of the leveraged buyouts remaining from the credit crisis era have restructured their balance sheets over the last several years, clearing out much of the default fuel that ignited during past periods of economic stress. In short, risks outside the CCC-rated tier – which typically accounts for 65% to 80% of defaults – should remain low, with default risk running below historic averages.

Healthy High Yield Market Fundamentals Keep Default Rates Low

US High Yield Debt Leverage Ratio Near Long-Term Average

(Total Debt/EBITDA)

US High Yield Debt Leverage Ratio Near Long-Term Average

High Yield Interest Coverage Near Highs

(Coverage Ratio vs. 20-Yr. Avg.)

US High Yield Debt Leverage Ratio Near Long-Term Average

Sources: (left) BofA Merrill Lynch, Federal Reserve as of 30 September 2019; (right) BofA Merrill Lynch as of 31 December 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any opinions, projections, estimates, forecasts and forward-looking statements presented herein are valid only as of the date of this presentation and are subject to change.

CCCs Historically Account for the Majority of High Yield Defaults

High Yield Par Weighted Default Rate (%)

US High Yield Debt Leverage Ratio Near Long-Term Average

Defaults Remain Isolated to Specific Sectors

BofAML US HY LTM Par Default Rate (%)

US High Yield Debt Leverage Ratio Near Long-Term Average

Source: BofA Merrill Lynch, 31 December 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material.


While leverage ticked up a bit in mid-2019 due to a moderate earnings slowdown, aggregate debt levels in leveraged finance markets did not rise much and leverage remains in line with the long-term averages. For the foreseeable future, we see little reason for concern over aggregate debt levels for the broad issuance base as high yield issuers are paying interest rates that hover around historic lows. However, simple math dictates that corporate deleveraging across all credit markets will need to happen alongside any material increase in interest rates in order to keep the default risk picture intact.

Potential risks ahead

Although we believe the likelihood of a recession or a near-recession in 2020 is low, a slowing economy producing lower earnings could negatively impact the high yield market. Another risk is a decline in underwriting standards. These can slip during periods when issuance surges. For that reason, investors should look at sectors that have seen large increases in issuance over the last five years. These spaces can see inflated valuation multiples due to the presence of private equity buyers and be accompanied by weaker covenants and capital structures, making them vulnerable during a recession.

Two sectors within the high yield marketplace that have seen significant issuance increases are health care and technology. Health care companies are often subject to legislative and reimbursement risk. Some technology companies have recently struggled as leveraged capital structures and changing business models caused volatility in cash flows. Earlier in the decade, retail and energy each saw large increases in issuance, which have been a material source of credit stress over the last few years. In retail, the shift to online shopping has sparked a large secular decline. Energy went through a shakeout in 2014–2016; now significant commodity price volatility and flagging investor interest plague the sector. Stable oil prices and management discipline have been promised, but not yet delivered, making 2020 a crucial year for energy.

Risk to Watch – High Issuance in Health Care and Technology

Debt Growth by Sector, Last 5 Years (% of Initial Debt Outstanding)

Risk to Watch – High Issuance in Health Care and Technology

Source: BofA Merrill Lynch, 30 September 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material.


Ratings migration is another risk. Massive issuance of BBB-rated credits – the lowest tier in the investment grade market – has fueled fears that widespread ratings downgrades in the wake of a business downturn could swamp the high yield market. Though the BBB-rated segment represents a larger proportion of the investment-grade market than it has historically, we’re confident of the tier’s health and not overly concerned about a large wave of “fallen angel” issuance crashing into high yield. In actuality, most of the downgrades involve small, isolated pockets of the market. These include levered credits in health care, gaming, and energy, and secular issues, particularly those in media and retail.

Finally, we’re more wary of the effects of interest rates on our portfolios. We’ve seen a significant tailwind from duration and curve in the markets, but it seems unreasonable to expect further support going forward. Central banks remain accommodative but are likely to utilize any constructive macroeconomic backdrop to attempt policy normalization. If yield curves shift upward by 100 to 150 basis points over a three-year period, the interest coverage thesis we have outlined as a factor keeping defaults relatively low could be imperiled.

Why credit selection is key

Changing investor views in high yield have triggered wide dispersion among ratings, tiers, industry sectors, and individual issuers. Credit spreads in upper-rated tiers have tightened as investors have favored higher quality issues so far in this cycle. That has reduced liquidity premiums, and spreads for bonds rated BBB and BB have narrowed to historically tight levels. Meanwhile, spreads on CCC- and B-rated issues have widened, making this a potentially attractive space to take on additional illiquidity risk, with the expectation that premiums will normalize in the future. Dispersions show cyclical sectors are out of favor and defensive sectors are preferred, with a large premium between the two.

Liquidity Premiums Remain Wide in Single-Bs Versus BBs

BBs Smallest vs. Largest Debt Cap Structures OAS

BBs Smallest vs. Largest Debt Cap Structures OAS


Bs Smallest vs. Largest Debt Cap Structures OAS

Bs Smallest vs. Largest Debt Cap Structures OAS

Source: BofA Merrill Lynch, as of 8 November 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any opinions, projections, estimates, forecasts and forward-looking statements presented herein are valid only as of the date of this presentation and are subject to change.


The overall fundamental environment is one where excesses in the highest risk segments of the market have been controlled compared to previous cycles, but where there is rising dispersion – something not usually seen when spreads are near the long-term average. That indicates the availability of many issuer-specific opportunities and provides opportunities for active managers.

Take energy, for example. It was the worst-performing sector of 2019 and accounted for 55% of the year’s US high yield defaults.3 But dispersion across energy subsectors has been significant with refining outperforming the index by 8.9%, while oil field services and independents have largely underperformed by -15.7% and -12.4%, respectively.4

Broad Yield Dispersion Across and Within High Yield Sectors and Issuers Provides Opportunities for Active Managers

Bloomberg Barclays US High Yield Ba/B Index

Broad Yield Dispersion Across and Within High Yield Sectors and Issuers Provides Opportunitiesfor Active Managers

Source: Bloomberg Barclays, as of 19 December 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any opinions, projections, estimates, forecasts and forward-looking statements presented herein are valid only as of the date of this presentation and are subject to change. Diversification does not necessarily ensure against market loss.


We believe such sector dispersions create opportunities for issuer-specific views – even at this stage of the credit cycle – as the current yield represents more than half of the long-term return in this asset class. Furthermore, we see a large proportion of sector and ratings themes that undervalue multiple issuers of good credit quality.

Portfolio positioning in 2020

When considering the right adjustments to make for their high yield assets, investors should look to keep risk low at the portfolio level but not eliminate it entirely. Overall valuations are fairly valued in general and are likely over-valued for higher quality issuers and sectors, but we see increased dispersion within asset classes, which presents several issuer-specific opportunities that a blanket risk-avoidance policy would miss.

In fact, while security selection is always a factor, we believe it will be especially critical in 2020. Given current valuations, it is difficult to see how industry or ratings factors could drive materially positive outcomes if the economic cycle continues. Further, it’s difficult for us to envision many scenarios in which the yield curve continues to provide the tailwind that has been its signature over the past 20 years. Accordingly, we are managing the effects of longer duration in our high yield portfolios by paying close attention to our key rate exposures and thinking a lot more about roll-down and carry, as opposed to just taking extension risk from a term perspective.

While we are constructive, we are cognizant that absolute rates of return are relatively low and tail outcomes are tilted to the downside. BB is unlikely to drive returns due to valuations and the likely interest rate path. CCC credit appears cheap, but there are good reasons to be wary of this space despite issuer-specific opportunities. The middle B rating tier generally strikes the balance of risk and return, and we expect to find most of the available opportunities here. We are confident that the macro picture is likely to be stable to improving but recognize that the valuation cushion to compensate for adverse outcomes is smaller than we’d prefer, hence our selective risk positioning as opposed to more of a beta-plus view.

While risks remain from a decade of loose monetary policy that has driven investors further down the credit scale in search of yield, fundamentals in the high yield market are holding steady. And while investors should anticipate lower returns going forward, they can still benefit by positioning portfolios to capture the income offered by credit markets and add additional value by taking advantage of issuer dispersion through research-intensive processes that uncover opportunities in intermediate-quality, undervalued issuers.

Footnotes

1 Bank of America Merrill Lynch as of 31 December 2019.
2 Bank of America Merrill Lynch as of 31 December 2019.
3 By par amount, BofA Merrill Lynch as of 31 December 2019.
4 Bloomberg Barclays as of 31 December 2019.


Disclosure

Investing involves risk, including possible loss of principal. The information presented herein is for illustrative purposes only and should not be considered reflective of any particular security, strategy, or investment product. It represents a general assessment of the markets at a specific time and is not a guarantee of future performance results or market movement. This material does not constitute investment, financial, legal, tax, or other advice; investment research or a product of any research department; an offer to sell, or the solicitation of an offer to purchase any security or interest in a fund; or a recommendation for any investment product or strategy. PineBridge Investments is not soliciting or recommending any action based on information in this document. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author, may differ from the views or opinions expressed by other areas of PineBridge Investments, and are only for general informational purposes as of the date indicated. Views may be based on third-party data that has not been independently verified. PineBridge Investments does not approve of or endorse any re-publication or sharing of this material. You are solely responsible for deciding whether any investment product or strategy is appropriate for you based upon your investment goals, financial situation and tolerance for risk.

Источник: https://www.pinebridge.com/en/insights/2020-outlook-high-yield-finds-its-sweet-spot-in-single-bs

Bull market to wind down next year, warns BofA Merrill Lynch

The long bull market cycle of excess stock and bond returns is expected to finally wind down next year, but not before one last hurrah, according to BofA Merrill Lynch Global Research in its outlook for the global markets and economy in 2019.

The bear market vibe at the end of 2018 is expected to continue, with asset prices finding their lows in the first half of 2019 once rate expectations peak and global earnings expectations trough. But BofA Merrill Lynch also forecasts a record high in earnings for the S&P 500 next year and plenty of upside potential for investors that make volatility their new best friend.

‘In our view, the current weakness in the markets is not a reflection of poor fundamentals. Rather, it’s caused by a confluence of idiosyncratic shocks that create very real risks for investors to be concerned about – but also opportunities for vigilant, well-positioned investors to pursue,’ says Candace Browning, head of BofA Merrill Lynch Global Research, in a statement.

For the year ahead, the research team forecasts modest gains in equities and credit, a weaker dollar, widening credit spreads and a flattening-to-inverted yield curve, signaling a tighter squeeze on liquidity that calls for higher levels of volatility. This comes against a backdrop of slowing ­– but still healthy – economic growth, mild inflation, except in the US where inflationary pressures are building, and a notable slowing in global earnings per share (EPS) growth from the torrid pace of 2017 and 2018.

Two big themes are expected to affect asset returns and the pace of economic growth in 2019: first, an unprecedented level of global monetary policy divergence as the US Federal Reserve continues to hike interest rates and other major central banks don’t, and second, whether a strong US economy decoupled from the rest of the world, particularly Europe and China, can be sustained.

The answer to that question could depend on big wild card risks in 2019: resolution of the trade war between China and the US, an EU political/economic crisis, and political gridlock in the US that could slow capital investments and deteriorate investor sentiment.

Analysts from the global research firm summarize their views on the market and make the following 10 macro calls for the year ahead. 

1.      Global profit growth declines: Earnings growth is expected to decline sharply next year, from more than 15 percent to less than 5 percent on a year-over-year basis. The BofA Merrill Lynch Research team is bearish on stocks, bonds and the US dollar, bullish on cash and commodities, and long on volatility. The investment bank expects to turn tactically risk-on in late spring, but to start 2019 with a bearish asset allocation of 50 percent stocks, 25 percent bonds and 25 percent cash.

2.      S&P 500 Index peaks: Earnings growth is also likely to slow in the US, though the near-term outlook remains somewhat positive. The S&P 500 Index is expected to peak at or slightly above 3,000 before settling in at a year-end target of 2,900. BofA Merrill Lynch forecast EPS growth of 5 percent, which would put the S&P 500 EPS at a record high of $170 next year. The investment bank’s US equity strategists are overweight healthcare, technology, utilities, financials and industrials, and underweight consumer discretionary, communication services and real estate.

3.      Cash gets competitive: For most of this long cycle, cash yields couldn’t hold a candle to more compelling asset class alternatives like stocks and bonds. With cash yields higher than dividend yields for 60 percent of the S&P 500 already, cash becomes even more competitive in 2019. BofA Merrill Lynch’s Fed call puts short rates close to 3.5 percent by the end of 2019, well above the S&P 500’s 1.9 percent dividend yield. Moreover, in a rising-rate environment, cash-generative investments have outperformed credit-sensitive assets. Given cash’s rerating, 2019 boils down to a strategy of buying sources of cash and selling users of cash.

4.      US economy slows as fiscal stimulus fades: Real US GDP growth of 2.7 percent is forecast for 2019, slowing in the second half of the year as the effects of fiscal stimulus begin to fade. The unemployment rate could reach a 65-year low of 3.2 percent by year-end, pushing wage growth of 3.5 percent in aggregate. Consequently, core price inflation should gradually rise to 2.2 percent through 2019 and hold as rates continue to rise. The housing market is no longer a tailwind for the US economy: BofA Merrill Lynch believes housing sales have peaked and house price appreciation is forecast to slow.

5.      Global economic growth decelerates: The global economy is forecast to grow 3.6 percent in 2019, down slightly from 3.8 percent in 2018, with inflation hovering around 3 percent. Most major economies are likely to see decelerating activity, with real GDP growth of 1.4 percent in both Europe and Japan, and 4.6 percent growth in aggregate among the emerging markets. Chinese growth is likely to further weaken early next year as a result of still-tight financial conditions and the US-China trade conflict. But a steady stream of monetary and fiscal stimulus measures to turn the economy around is expected.

6.      Global monetary policy divergence: Global monetary policy is expected to become less friendly in 2019. A divided government means additional fiscal stimulus in the US seems unlikely. Europe is largely frozen in place by its budget rules, and Japan appears ready to implement yet another ill-timed consumption tax hike. Further divergence in monetary policy between the Fed and other major central banks is expected to continue. BofA Merrill Lynch forecasts the Fed will hike rates four times in 2019, reaching a terminal funds rate of 3.25 percent-3.5 percent by year-end. Meanwhile, the European Central Bank and Bank of Japan are unlikely to raise policy rates meaningfully above zero for at least another two years.

7.      Credit cycle continues despite widening spreads and flattening curves: Globally, the credit markets face high levels of episodic volatility in 2019 with shrinking supply and quantitative tightening putting 25-50 basis points of upward pressure on investment-grade and high-yield bond spreads. In the US, total returns of 1.42 percent are forecast for high-grade corporate bonds and 2.4 percent for high yield. The US-leveraged loan market remains a bright spot in the credit spectrum, with total returns of between 4 percent and 5 percent. High-grade and high-yield corporate credit are expected to deliver total returns of 1 percent in Europe and, in Asia, 3 percent and 4.9 percent, respectively.

8.      Emerging markets: After a major sell-off in 2018, emerging market assets are cheap and under-owned and could be a big winner in 2019 as the dollar weakens, yet emerging markets remain highly vulnerable to spillover effects of the US-China trade tensions. BofA Merrill Lynch is bullish on Brazil and expects its post-election rally to continue – and Russia is expected to improve as BofA Merrill Lynch believes sanction risk is priced in. Meanwhile, the outlook is bearish for Mexico, where credit rating downgrades are a concern and volatility surrounds policy changes under its new president.

9.      Foreign exchange volatility on a weaker dollar: The US dollar was the best-performing asset class in 2018, though most of the dollar gains appear to be in the past. A weaker dollar is expected in 2019 against a stronger euro and Japanese yen. BofA Merrill Lynch forecasts the euro/US dollar and US dollar/Japanese yen to reach 1.25 and 105, respectively, at year-end. The strength of the dollar will depend heavily on the evolution of the trade relationship between China and the US, which in the short term may mean selling the dollar against a currency insulated from trade war rhetoric, such as the British pound and Swiss franc.

10.  Commodities modestly positive: The outlook for commodities is modestly positive despite a challenging global macro environment. BofA Merrill Lynch forecasts Brent and WTI crude oil prices to average $70 and $59 per barrel, respectively, in 2019. In metals, BofA Merrill Lynch remains cautious about copper because of Chinese downside risk. BofA Merrill Lynch also forecasts gold prices will rise to an average of $1,296 per ounce, but could go as high as $1,400, driven by US twin deficits and Chinese stimulus.

Источник: https://www.irmagazine.com/buy-side/bull-market-wind-down-next-year-warns-bofa-merrill-lynch

Technology Trends – Charting the 2019 Outlook

The US Economy and Its Impact on the Technology Sector

For the most part, 2018 was a solid year for the American economy with its gears grinding on most of its cylinders. The spending of consumers increased and companies had more investments. But the year 2019 may offer a slowing down of this growth according to expert analysis of economists.

The Bureau of Economic Statistics recorded a growing pace of 3.5% for the US gross domestic product (GDP) of the US in the third quarter of 2018. This rose to 4.2% during the fourth quarter.

Yet these inspiring numbers may not be sustainable for 2019. Goldman released their prediction that the GDP may decline by 1.8% this coming third quarter of 2019 and may continue to plummet to 1.6% during the fourth quarter of 2019.

Experts believe the positive growth of 2018 was a direct result of tax cuts in 2017. For this fiscal year, Goldman expects a tightening of financial conditions.

However, the outlook is not entirely dim. There is just a balance of caution and optimism for 2019. The American economy may slow down but it will not yet enter recession this year. There is also an enduring belief that the technology industry will continue to play a pivotal role in keeping the economy afloat and alive.

The US Economy: Crunching the Numbers

Reuters conducted a survey of economists about the possibility of a recession in the US for 2019 and most responded that the probability is low at 35%. But the forecasts are not overly optimistic either. Several economic and political factors have been identified as challenges for the US economy.

These include the continuous rise of interest rates, difficulties in controlling borrowing costs for consumers, and more trade tariffs by virtue of President Donald Trump’s aggressive trade policies.

Moreover, the global economy is not as energetic too. The Organization for Economic Cooperation and Development provided a lower forecast for the economy of the entire world from 3.5% – down a few notches from its earlier forecast of 3.7%. The thinktank believes that the prospects of global expansion has reached its peak and may likely slowdown in the next two years.

In a separate assessment, Bank of America Merrill Lynch had a survey of fund managers. 44% of them expressed insights that global growth will slow down in 2019.

Some of the global events that have been contributing to this uninspired forecast include the continuing Brexit trade wars, the tension between Italy and the European Union, more US sanctions for Iran and shaky stock markets, to mention a few.

But there is still light at the end of the tunnel for the American economy.

The US has the world’s largest economy and it has strengthened further with the creation of more jobs. Most of these employment opportunities emerged from the dominance of its technology sector.

The Tech Titans of America: Heavy Lifters of the US Economy

The tech sector continues to be a bright spot for the American economy.

Even when the Trump Administration hasn’t delivered yet on some of its promises such as the deregulation of the financial sector and tax reforms, the stock market hasn’t come to a screeching halt.

Most experts give credit to the strong performance of tech giants such as Apple, Alphabet (the parent company of Google), Facebook, and Amazon.

They comprise 37% of the total market gains of America presently.

Wall Street experts fondly call these tech giants GAFA or Google, Amazon, Facebook and Apple. James Pethokoukis has this to say about GAFA in his opinion piece “Leave Silicon Valley Alone” from theweek.com:

“Google, Amazon, Facebook, and Apple — what Wall Street calls GAFA — are four of America’s most valuable and important companies, providing a massive benefit to consumers. Collectively they’re the Tony Stark of corporate America: They pay for everything, design everything, and make everyone look cooler. If the U.S. is going to remain the world’s technological leader against China’s challenge, GAFA will be pivotal.”

The Economist noted that ten years ago, the five largest spenders of America were bastions of traditional businesses such as AT&T, Chevron, ExxonMobil, General Electric and Verizon.

Now the top five are Alphabet, Amazon, Apple, Intel, and Microsoft – all tech giants.

They accounted for 80% of America’s advanced industries from 2015 to 2017

These tech companies have smartly reinvested 50% of their total gross cash-flow towards productive projects such as properties, plants, and equipment.

For example, Alphabet is redeveloping Chelsea Market in New York while also funding vital data centers.

Amazon is creating e-commerce fulfillment centers to remain in the lead as far as online market activity is concerned.

Semiconductor firms are expanding productions to help out sustainable technologies such as machine learning and autonomous (self-driving) cars.

Most tech giants are also improving access to cloud computing capacity. This has made it easier for other industries to be more efficient in their data handling and storage needs.

Cloud Computing and Data Management Solutions

Among the strongest suits of the digital sector is the emergence of technologies that focus on efficiency: cloud computing and data management systems.

Cloud computing remains one of the budding technologies with a strong grip in the market. This technology focuses on the collection and storage of big data and information security.

Data management systems have also become vital to ensure that data can be accessed uniformly, systematically and efficiently across various platforms.

These breakthroughs have become useful and integral to other non-tech companies. Other industries have been using these technologies such as health care, transportation, education, energy, entertainment, communications, finance, and professional services.

Tech titans keep finding ways to integrate itself as a need, in various sectors. Take for example Google’s efforts to focus on education by making it easier to transmit information, documents and other deliverables online with the help of Google platforms such as Gmail and Google Drive.

Mobile operating systems have basically become a two-way race between Apple and Alphabet.

Facebook and Google comprise three-quarters of the digital advertising industry in 2016.

The tech giants have become the centers of gravity for the American economy. Cloud computing and data management systems have created a lot of employment opportunities and earning potential in America. Even with the unpredictability of economic policies and even politics, IT-related companies have a sustainable path to revenues.

According to Cyberstates 2018, there is an expected rise of 13 percent in computer and IT-related jobs between 2016 to 2018. Among all other occupations in the US, this is the fastest rate so far.

The tech boom has also become a benefit for non-tech companies which provide a wide range of services and products.

Examples of these are FedEx and UPS which have been improving their e-commerce capabilities by purchasing airplanes and creating more depots.

The emergence of cloud storage and data management systems has also increased the demand for peripherals such as server racks, wall mounts, and cable managers for databases.

Politics and the Tech Sector

Remarkably, one of the biggest challenges of the tech industry has nothing to do with technological limitations. The point of contention so far is politics and policies.

The ongoing trade tension between Washington and Beijing has created frosty relationships and potential deadlocks when it comes to emerging technologies and supplies of spare parts.

Trump has recently put tariffs amounting to $250 Billion of Chinese products, including tech goods.

Washington has put out threats that they will enforce export controls on a wide range of digital breakthroughs developed by American tech titans.

Google, Facebook, Intel, Amazon, and NVIDIA have so far created significant milestones and strides when it comes to these new technologies:

  • Machine learning and neural networks
  • Computer vision
  • Artificial intelligence
  • Cloud services Dedicated chipsets
  • Autonomous vehicles
  • Augmented and virtual reality

The US government is citing national security grounds as reasons for these export controls. They believe that China is stealing intellectual property rights of American tech titans using predatory and unfair means.

The hope is by enforcing export controls, it will be difficult for China to have access to these breakthrough technologies.

But if these technologies are withheld or hidden, it doesn’t necessarily mean China will never have access. Most tech analysts believe that China has moved on from stealing and they are also competitive in their own innovations.

Moreover, these scientific breakthroughs are also available in academic circles. There is nothing that is stopping China from accessing these technologies using academic sources.

Analysts believe that other countries may develop the same technology that America will be hiding or withholding, and sell their own versions. It can potentially lead to significant revenue losses for US companies.

In the long run, it can compromise the considerable lead of American tech titans in the digital sector that they have worked hard to build.

Ed Black, chief executive of the Computer and Communications Industry Association has this to say:

“It does not seem to me like it is a well-thought-out game plan. The gap between . . . what [the administration] would like to do and what they can reasonably accomplish is potentially very large. That, I think, is an indication that they have yet to fully develop a strategic or tactical approach.”

As far as production of parts and peripherals is concerned, on the other hand, it can be an opportunity for American companies to rely more on internal capabilities and further improve the production of spare parts and other IT-related peripherals.

Rocky Relationship with the White House

It’s not only with China. President Donald Trump also doesn’t have the most ideal relationship with American tech companies – even though it has been well-established that the economic dominance of the US globally is largely powered by its tech titans.

Recently, Washington has imposed immigration limits for tech companies. This would severely hamper the performance of companies who rely on the H-1B visa program that allows them to hire highly skilled workers from overseas.

Trump’s ongoing trade war with China also has serious implications on gadget makers, especially small startups for hardware. The supply of spare parts abroad may experience difficulties. This may lead to the transfer of the burden to consumers through higher retail prices.

Upward Trajectory for the IT Sector

Despite the challenges they are facing in the economic and political climate, the outlook for tech companies is very optimistic this 2019.

Silicon Valley in the southern Bay Area of Northern California remains the iconic core of tech companies. Analysts hope tech companies will keep branching out further into the Heartland to gain more momentum for the industry and to provide more jobs.

Tech titans Amazon, Google, and Apple have started offering high-level posts away from the typical hubs of Seattle and the Bay Area.

Tech companies are putting a premium on finding talent in various parts of America.

The success of the tech boom is not limited to Silicon Valley. The outlook is trending upwards for the entire country. In 22 states, tech companies rank among the top five economic contributors.

Information Technology Job Sector Growth Chart

Data from Brookings from 2015 to 2017 show that there have been massive IT growth in areas outside of Silicon Valley. Consider the following:

Wichita, Kansas: 552 jobs, 18.9% change
Lakeland-Winter Haven, Florida: 196 jobs, 15.4% change
Chattanooga, Tennessee-Georgia: 285 jobs, 11.6% change
Boise City, Idaho: 785 jobs, 11.6% change

The established IT hubs have also strengthened their base. Most new tech jobs are still offered in markets that are already focused on technology:

• San Francisco
• Seattle
• San Jose
• Los Angeles
• Austin

Tech Titans and the Cloud

The leading IT companies have put an emphasis on cloud computing, data management systems and other emerging technologies. This has opened highways of revenue potential for tech and non-tech companies that are providing related products and services.

With the tech titans in the lead, the economic outlook for the entire IT sector is sustainable and encouraging.

Google has a good stake in the cloud industry sweepstakes. With their free platforms, they have created a higher demand for data storage, higher resolutions for images and larger sizes for files. Google is in a good position to respond to more data demand in the future.

Alphabet, the parent company of Google, has also invested in Waymo, a unit for autonomous transportation that focuses on robo-taxi services. Going into the future, it has a valuation of $175 billion and can increase further as data management for this technology continues to progress.

Apple, on the other hand, had a relatively lost year for 2018. While it received a year-high 25% growth in 2018, investors eventually felt the momentum slowed down along with the decline of iPhone sales in the last months of 2018.

Daniel Ives, an analyst from Wedbush Securities, mention two critical factors in the down year of Apple: the slowdown in iPhone sales and the lack of transparency for investors.

But thankfully like other tech titans, Apple is not a one trick pony. 5G technology is set to arrive in late 2019 and Apple is in a good position to capitalize on it. With this, investors may expect positive growth for Apple’s stock in the latter months of 2019.

Another technology that Apple can bank on is the possibility of releasing a video service that will go head to head with Netflix and Amazon Prime Video. The anticipated increase in Apple’s needs for data management can only bode well for the future of the IT sector.

As for the software industry, there is a growing dependence on big data management and cloud storage. It is also encouraging to note that the sector has created 10.5 million jobs in America across all 50 states – a strong indication that the sector is here to stay.

Because of this impact, the software industry accounts for $1.14 trillion of the US Gross Domestic Product (GDP). Software companies also find ways to keep this sustainable and thus they have devoted $63.1 billion for research and development.

Enduring Economic Challenges for a Stable and Sustainable 2019

Despite challenges, tech companies will keep on grinding like clockwork and producing outputs at a high clip.

The key to all of this is innovation. The tech titans of America continue to have access to breakthrough technologies that change the way the world does its business.

And while there will be hiccups along the way, technology and innovation are like freight trains that are hard to stop, especially when the world embraces their ways and means.

This is what happened when Google became a household name as an online search engine. Or how Facebook evolved from a college project to the primary energy behind social media. Or Apple’s prototypes that projected smartphones as a need and not as a luxury.

The tech sector will continue to blaze trails not only for America but also the entire world. It will open several gateways to more productivity and jobs.

Currently, most private sector jobs are provided by companies that have been created less than five years old. These are companies that are powered by innovation and technology, currently employing over 6.7 million people and bringing back more work in the US.

It significantly decreases the need to outsource jobs.

The automation of several non-tech industries has also increased the productivity and efficiency of the US economy. These have caused lower prices and higher demands, which in turn causes more employment opportunities for Americans.

The future is still bright for the tech titans of America. It is already unstoppable now, and it can only gain more momentum in the future. If there is a force that can make America great again, look no further than Silicon Valley to take the lead. Innovation is at the heart of it all.

There was a time when technology was just an exciting possibility: a door that can open multiple gateways, a prospect that can lead to diversionary fun and games.

But times have changed. Technology is now the game. Technology is now.

Digital breakthroughs can change the landscape of the world with the touch of a fingertip. There is barely any time to catch up on the latest trends.

But idly wink, and it can lead to significant financial losses or a plunge to irrelevance if a company doesn’t pay attention. It’s keep up or pay the price.

Cradled in Silicon Valley, the leading technological titans of America have wasted no time sprinting ahead of the competition in their respective industries. The world has followed their leads.

Even with the unpredictability of government interventions and market forces, the tech titans of America are safe. They ensure the stability of the entire IT sector for 2019 and beyond.

A thriving innovation ecosystem, in turn, will provide smarter opportunities for growing our economy, protecting the environment, boosting education, and improving public safety.” – Chris Hopfensperger, executive director of Software.org.

Summary

Technology Trends - Charting the 2019 Outlook - RackSolutions

Article Name

Technology Trends - Charting the 2019 Outlook - RackSolutions

Description

American economy may slow down but there is an enduring belief that the technology industry will play a pivotal role in keeping the economy afloat.

Author

Fabio Cuffaro

Publisher Name

RackSolutions

Publisher Logo

RackSolutions
Источник: https://www.racksolutions.com/news/blog/technology-trends-2019-outlook/

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2020 Outlook: High Yield Finds Its Sweet Spot in Single Bs

In 2019, rotation to higher quality credit and duration was well rewarded. But so many investors made the move that BB-rated credit now trades at relatively rich levels versus investment grade (IG) credit and the overall high yield index. As a result, and given our expectations of a low-growth, low-inflation environment for 2020 with low yields and low returns, we recommend adjusting credit portfolios to a neutral risk posture and trying to exploit issuer-specific opportunities.

The current market

Against a backdrop of a reasonably supportive macroeconomic environment – slowing growth, but no recession in the US – the fundamentals of the below-investment grade credit markets remain solid. Lower-rated issuance as a proportion of the total continues to fall, declining to less than 10% of the market from about 25% in the pre-crisis period.1 In addition, underwriting discipline has supported relatively healthy issuer practices and there has been a substantial clearing out of lower-rated issuance via a low, and steady, default rate. These factors have helped keep overall stress low and leverage in line with long-term averages, concentrating risk in the lower-ratings tier and in specific sectors.

Even if economic conditions worsen, the high yield market’s strong fundamentals should keep default rates low. A decade of declining interest rates has resulted in credit markets having historically high interest coverage ratios. Relatively lower debt service burdens have resulted in lower default rates, a trend we expect to continue. The default rate for the US high yield market now stands at about 3.5%,2 and defaults have been isolated to specific issuers with high levels of leverage relative to overall enterprise valuation. In fact, the inability to extend debt maturities – not the debt service burden itself – has been the key default trigger in this cycle.

With refinancing issuance over the last several years accounting for more than two-thirds of total issuance, most high yield issuers have managed to push their maturity schedules far into the future at historically low interest costs. Additionally, many of the leveraged buyouts remaining from the credit crisis era have restructured their balance sheets over the last several years, clearing out much of the default fuel that ignited during past periods of economic stress. In short, risks outside the CCC-rated tier – which typically accounts for 65% to 80% of defaults – should remain low, with default risk running below historic averages.

Healthy High Yield Market Fundamentals Keep Default Rates Low

US High Yield Debt Leverage Ratio Near Long-Term Average

(Total Debt/EBITDA)

US High Yield Debt Leverage Ratio Near Long-Term Average

High Yield Interest Coverage Near Highs

(Coverage Ratio vs. 20-Yr. Avg.)

US High Yield Debt Leverage Ratio Near Long-Term Average

Sources: (left) BofA Merrill Lynch, Federal Reserve as of 30 September 2019; (right) BofA Merrill Lynch as of 31 December 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any opinions, projections, estimates, forecasts and forward-looking statements presented herein are valid only as of the date of this presentation and are subject to change.

CCCs Historically Account for the Majority of High Yield Defaults

High Yield Par Weighted Default Rate (%)

US High Yield Debt Leverage Ratio Near Long-Term Average

Defaults Remain Isolated to Specific Sectors

BofAML US HY LTM Par Default Rate (%)

US High Yield Debt Leverage Ratio Near Long-Term Average

Source: BofA Merrill Lynch, 31 December 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material.


While leverage ticked up a bit in mid-2019 due to a moderate earnings slowdown, aggregate debt levels in leveraged finance markets did not rise much first national bank of america home loans leverage remains in line with the long-term averages. For the foreseeable future, we see little reason for concern over aggregate debt levels for the broad issuance base as high yield issuers are paying interest rates that hover around historic lows. However, simple math dictates that corporate deleveraging across all credit markets will need to happen alongside any material increase in interest rates in order to keep the default risk picture intact.

Potential risks ahead

Although we believe the likelihood of a recession or a near-recession in 2020 is low, a slowing economy producing lower earnings could negatively impact the high yield market. Another risk bank of america rv loans a decline in underwriting standards. These can slip during periods when issuance surges. For that reason, investors should look at sectors that have seen large increases in issuance over the last five years. These spaces can see inflated valuation multiples due to the presence of private equity buyers and be accompanied by weaker covenants and capital structures, making them vulnerable during a recession.

Two sectors within the high yield marketplace that have seen significant issuance increases are health care and technology. Health care companies are often subject to legislative and reimbursement risk. Some technology companies have recently struggled as leveraged capital structures and changing business models caused volatility in cash flows. Earlier in the decade, retail and energy each saw large increases in issuance, which have been a material source of credit stress over the last few years. In retail, the shift to online shopping has sparked a large secular decline. Energy went through a shakeout in 2014–2016; now significant commodity price volatility and flagging investor interest plague the sector. Stable oil prices and management discipline have been promised, but not yet delivered, making 2020 a crucial year for energy.

Risk to Watch – High Issuance in Health Care and Technology

Debt Growth by Sector, Last 5 Years (% of Initial Debt Outstanding)

Risk to Watch – High Issuance in Health Care and Technology

Source: BofA Merrill Lynch, 30 September 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material.


Ratings migration is another risk. Massive issuance of BBB-rated credits – the lowest tier in the investment grade market – has fueled fears that widespread ratings downgrades in the wake of a business downturn could swamp stevie wonder songs in the key of life collectors album high yield market. Though the BBB-rated segment represents a larger proportion of the investment-grade market than it has historically, we’re confident of the tier’s health and not overly concerned about a large wave of “fallen angel” issuance crashing into high yield. In actuality, most of the downgrades involve small, isolated pockets of the market. These include levered credits in health care, gaming, and energy, and secular issues, particularly those in media and retail.

Finally, we’re more wary of the effects call td bank 1 800 number interest rates on our portfolios. We’ve seen a significant tailwind from duration and curve in the markets, but it seems unreasonable to expect further support going forward. Central banks remain accommodative but are likely to utilize any constructive macroeconomic backdrop to attempt policy normalization. If yield curves shift upward by 100 to 150 basis points over a three-year period, the interest coverage thesis we have outlined as a factor keeping defaults relatively low could be imperiled.

Why credit selection is key

Changing investor views in high yield have triggered wide dispersion among ratings, tiers, industry sectors, and individual issuers. Credit spreads in upper-rated tiers have tightened as investors have favored higher quality issues so far in this cycle. That has reduced liquidity premiums, and spreads for bonds rated BBB and BB have narrowed to historically tight levels. Meanwhile, spreads on CCC- and B-rated issues have widened, making this a potentially attractive space to take on additional deutsche bank stock buy or sell risk, with the expectation that premiums will normalize in the future. Dispersions show cyclical sectors are out of favor and defensive sectors are preferred, with a large premium between the two.

Liquidity Premiums Remain Wide in Single-Bs Versus BBs

BBs Smallest vs. Largest Debt Cap Structures OAS

BBs Smallest vs. Largest Debt Cap Structures OAS


Bs Smallest vs. Largest Debt Cap Structures OAS

Bs Smallest vs. Largest Debt Cap Structures OAS

Source: BofA Merrill Lynch, as of 8 November 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any opinions, projections, estimates, forecasts and forward-looking statements presented herein are valid only as of the date of this presentation and are subject to change.


The overall fundamental environment is one where excesses in the highest risk segments of the market have been controlled compared to previous cycles, but where there is rising dispersion – something not usually seen when spreads are near the long-term average. That indicates the availability of many issuer-specific opportunities and provides opportunities for active managers.

Take energy, for example. It was the worst-performing sector of 2019 and accounted for 55% of the year’s US high yield defaults.3 But dispersion across energy subsectors has been significant with refining outperforming the index by 8.9%, while oil field services and independents have largely underperformed by -15.7% and -12.4%, respectively.4

Broad Yield Dispersion Across and Within High Yield Sectors and Issuers Provides Opportunities for Active Managers

Bloomberg Barclays US High Yield Ba/B Index

Broad Yield Dispersion Across and Within High Yield Sectors and Issuers Provides Opportunitiesfor Active Managers

Source: Bloomberg Barclays, as of 19 December 2019. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any opinions, projections, estimates, forecasts and forward-looking statements presented herein are valid only as of the date of this presentation and are subject to change. Diversification does not necessarily ensure against market loss.


We believe such sector dispersions create opportunities for issuer-specific views – even at this stage of the credit cycle – as the current yield represents more than half of the long-term return in this asset class. Furthermore, we see a large proportion of sector and ratings themes that undervalue multiple issuers of good credit quality.

Portfolio positioning in 2020

When considering the right adjustments to make for their high yield assets, investors should look to keep risk low at the portfolio level but not eliminate it entirely. Overall valuations are fairly valued in general and are likely over-valued for higher quality issuers and sectors, but we see increased dispersion within asset classes, which presents several issuer-specific opportunities that a blanket risk-avoidance policy would miss.

In fact, while security selection is always a factor, we believe it will be especially critical in 2020. Given current valuations, it is difficult to see how industry or ratings factors could drive materially positive outcomes if the economic cycle continues. Further, it’s difficult for us bank of america merrill lynch 2019 outlook envision many scenarios in bank of america merrill lynch 2019 outlook the yield curve continues to provide the tailwind that has been its signature over the past 20 years. Accordingly, we are managing the effects of longer duration in our high yield portfolios by paying close attention to our key rate exposures and thinking a lot more about roll-down and carry, as opposed to just taking extension risk from a term perspective.

While we are constructive, we are cognizant that absolute rates of return are relatively low and tail outcomes are tilted to the downside. BB is unlikely to drive returns due to valuations and the likely interest rate path. CCC credit appears cheap, but there are good reasons to be wary of this space despite issuer-specific opportunities. The middle B rating tier generally strikes the balance of risk and return, and we expect to west coast of the united states marriott vacation club most of the available opportunities here. We are confident that the macro picture is likely to be stable to improving but recognize that the valuation cushion to compensate for adverse outcomes is smaller than we’d prefer, hence our selective risk positioning as opposed to more of a beta-plus view.

While risks remain from a decade of loose monetary policy that has driven investors further down the credit scale in search of yield, fundamentals in the high yield market are holding steady. And while investors should anticipate lower returns going forward, they can still benefit by positioning portfolios to capture the income offered by credit markets and add additional value by taking advantage of issuer dispersion through research-intensive processes that uncover opportunities in intermediate-quality, undervalued issuers.

Footnotes

1 Bank of America Merrill Lynch as of bank of america merrill lynch 2019 outlook December 2019.
2 Bank of America Merrill Lynch as of 31 December 2019.
3 By par amount, BofA Merrill Lynch as of 31 December 2019.
4 Bloomberg Barclays as of 31 December 2019.


Disclosure

Investing involves risk, including possible loss of principal. The information presented herein is for illustrative purposes only and should not be considered reflective of any particular security, strategy, or investment product. It represents a general assessment of the markets at a specific time and is not a guarantee of future performance results or market movement. This material does not constitute investment, financial, legal, tax, or other advice; investment research or a product of any research department; an offer to sell, or the solicitation of an offer to purchase any security or interest in a fund; or a recommendation for any investment product or strategy. PineBridge Investments is not soliciting or recommending any action based on information in this document. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author, may differ from the views or opinions expressed by other areas of PineBridge Investments, and are only for general informational purposes as of the date indicated. Views may be based on third-party data that has not been independently verified. PineBridge Investments does not approve of or endorse any re-publication or sharing of this material. You are solely responsible for deciding whether any investment product or strategy is appropriate for you based upon your investment goals, financial situation and tolerance for how to use a greendot card without registering https://www.pinebridge.com/en/insights/2020-outlook-high-yield-finds-its-sweet-spot-in-single-bs

Weapon Systems

  • Presentation

    Navy Shipbuilding: Searching for a Path to a Larger and More Distributed Fleet

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, to the American Shipbuilding Suppliers Association.

  • Presentation

    The Capacity of the Navy’s Shipyards to Maintain Its Submarines

    Presentation by R. Derek Trunkey and Eric J. Labs, analysts in CBO's National Security Division, at the Annual Conference of the Western Economic Association International.

  • Presentation

    Shipbuilding and Expeditionary Warfare Operations

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, at the 2021 Virtual Expeditionary Warfare Conference.

  • Presentation

    Navy Shipbuilding: Prospects for Building a Larger Fleet

    Presentation by Eric J. Labs, an analyst best buy credit card account registration CBO’s National Security Division, at the Surface Navy Association’s 33rd Annual Symposium.

  • Presentation

    The 2021 Outlook for Navy Shipbuilding: Prospects and Challenges in Building a Larger Fleet

    Presentation by Eric J. Labs, an analyst in CBO’s National Security Division, at the Bank of America Merrill Lynch 2021 Defense Outlook and Commercial Aerospace Forum.

  • Presentation

    The Cost of Replacing Today’s Naval Aviation Fleets

    On June 27, 2020, R. Derek Trunkey, David Arthur, Edward G. Keating, and John Kerman (of CBO’s National Security Division) presented at the Annual Conference of the Western Economic Association International.

  • Presentation

    The 2020 Outlook for Navy Shipbuilding

    Presentation by Eric Labs, a senior analyst for naval forces and weapons in CBO’s National Security Division, at the Bank of America Merrill Lynch Defense Outlook Forum.

  • Presentation

    Prospects for DoD’s Acquisition Budget Over the Next Decade

    Presentation by David Mosher, CBO’s Assistant Director for National Security, at the Professional Services Council’s Vision Conference 2019.

  • Presentation

    The Navy’s Amphibious Warfare Force: Change Under Fiscal Constraints

    Presentation by Eric Labs, a senior analyst for naval forces and weapons in CBO’s National Security Division, at the National Defense Industrial Association’s 24th Annual Expeditionary Warfare Conference.

  • Presentation

    Funding Implications of Impending Retirements of Air Force Aircraft

    On Saturday, June 29, Adebayo Adedeji, an analyst in CBO’s National Security Division, presented at the Annual Conference of the Western Economic Association International.

Источник: https://www.cbo.gov/taxonomy/term/56/latest?type=5&page=0

Robert N. Hardwick CFP®

“We have two classes of forecasters: Those who don’t know – and those who don’t know they don’t know.”

 John Kenneth Galbraith

2019 should serve as another reminder that investors should expect the unexpected from the market. It should also, again, call into question the utility of stock market forecasting. 

The best summation of 2019 seems to be that it was the opposite of 2018. 

As we recall, 2018 started with Wall Street forecasting +9% returns for the S&P 500, with dividends reinvested(1). Instead, it finished -4.4%, punctuated by a -20% price decline to close out the year(2). The market seemed generally concerned that Fed policy was too tight and the trade war too violent(3). 

2019 erased those concerns. The Fed got the message(4) while the US and Chinese governments decided to stop throwing sand and play nicer(5). In my view, reversing these headwinds was a big reason the S&P 500 rose +31.49% in 2019. 

Where was Wall Street in forecasting this reversal? 

The average estimate was +21.4% bank of america merrill lynch 2019 outlook 2019, with dividends reinvested. While directionally accurate, it’s less impressive when you consider that it missed by 32.04% and that Wall Street Strategists haven’t collectively forecasted a down year for the past 20 years(6). And their up-year forecasts have missed by wide margins in the past as well(7).  

This brings us to this 2020. The Street is calling for an average gain of +3.43%(8). The range is -7.25% to +8.23%.  So all-in, they think it’ll be a benign year.  

Who wants to bet real money they’re right this time? 

Before you wager, remember your chances of being right about as good as the chimps who throw darts for research purposes(9). 

The best thing to do when someone sends you a 2020 stock market forecast is to throw it in your fireplace. Then, remind yourself of the historical data and that those thoughtful year-end forecasts are just marketing tools to stay in the press during the holiday slow period. They shouldn’t have much, if any, impact on your long-term financial outcomes.

Instead of starting your year asking what’s the market going to do, ask yourself: “what do I need from the market? And from my overall portfolio?” 

As a result, more relevant topics should surface, such as:

  • How much income will I need once I’m done working and am I on track to safely achieve it?
  • What is an appropriate amount to leave behind to future generations? 
  • Will those assets be distributed tax-efficiently?
  • Do I have a tax-efficient source of money to pay future healthcare expenses?
  • Is my portfolio taking too much, or too little, risk? 
  • What is the appropriate way to measure risk?
  • The list goes on…

Once you have a handle on these issues, you’ll know what your future liabilities should be and as a result, you’ll be better informed to allocate your portfolio. 

However, if your top priority is to just get more aggressive this year, you may be dealing capital one secured credit card online payment a case of FOMO (Fear of Missing Out) based on last year’s market performance. This is normal. Investors expectations of next year’s returns are typically informed by the prior year’s performance(10). Moreover, ameris bank online banking business we all move farther away from the 2008 financial crisis, our collective financial-PTSD(11, 12, 13) fades a bit more. So ever year that goes by post-crisis, we are a bit more likely to get more aggressive than last year. Provided the past year’s returns were positive, of course. 

So, instead of acting on an impulse that tells us to get aggressive at the start of the year, a better exercise would be to do the following:

  1. Confirm your risk profile, including if you’re unnecessarily seeking or avoiding risk
  2. Make sure your portfolio allocations are consistent with your long-term funding objectives
  3. Do nothing – if the first two suggestions check out. 

The rest is details. And yes, there are plenty to consider. And they are important. However, before you start going down the path of Roth vs. Traditional, HSA or not, or which of your awesome company benefits to leverage, confirm the big picture is nailed down. 

Otherwise, all that time in the weeds might be a waste if the market decides to throw a curve-ball that you’re not prepared for. 

And after all, when was the last time that happened?

Sources/Further Reading:

  1. Lucinda Shen, Will the Stock Market Crash in 2018? Here’s what Wall Street Predicts; Fortune Magazine, December 28, 2017
  2. S&P Dow Jones Indices; S&P 500 Fact Sheet, December 31, 2019
  3. Sarah Ponczeik, Vildana Hajric & Luke Kawa; U.S. Stocks Battered by Trade,Yield Concerns: Markets Wrap; Bloomberg; December 3, 2018
  4. Patti Domm; Powell aces tricky Fed transition to ending interest rate cuts, doing “100% of the right things”; CNBC; October 30, 2019
  5. Bloomberg News; U.S. Says Phase-One China Deal Would Include Tariff Rollback; November 6, 2019
  6. Jeff Sommer; Wall Street’s Annual Stock Forecasts: Bullish and Often Wrong; New York Times, December 6, 2016
  7. Jeff Sommer; Forget Stock Market Forecasts. They’re Less Than Worthless.; New York Times, December 23, 2019  
  8. CNBC Market Strategist Surgery; 2020
  9. Rick Ferri; Any Monkey Can Beat the Market; Forbes; December 20, 2012
  10. Hannes Mohrschladt; The Impact of Recency Effects on Stock Market Prices; University of Munster; November 21, 2018
  11. Bradley T. Klontz, PsyD., CFP and Sonya L. Britt, Ph.D., CFP, Financial Trauma: Why the Abandonment of Buy-and-Hold in favor of Tractical Asset Management May be a Symptom of Posttraumatic Stress; Journal of Financial Therapy – Volume 3, Issue 2, 2012
  12. Jack Singer; Dr. Jack’s Advice for Advisors: Recognizing PTSD Among Advisors; Financial Advisor Magazine; September 2, 2014
  13. Nicola Mucci, Gabriele Giorgi, and Giulio Arcangeli; The Correlation Between Stress and Economic Crisis: A Systematic Review; Neuropsychiatric Disease and Treatment; Dove Press; April 21, 2016 
Источник: https://perigonwealth.com/outlook-2020-what-to-watch-for-and-what-to-avoid/

Events

Bank of America Merrill Lynch 2019 Media, Communications & Entertainment Conference

September 11, 2019 at 5:20 PM EDT

This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to financial performance, operating results and strategy. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements in this presentation due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of the Company’s businesses. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the Securities and Exchange Commission (the “SEC”), including the Company’s Registration Statement on Form 10, filed with the SEC and declared effective by the SEC on February 5, 2019, and subsequent Quarterly Reports on Form 10-Q.

Statements in this presentation speak only as of the date they were made, and the Company undertakes no duty to update or release any revisions to any forward-looking statement made in this presentation or to report any events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in the Company’s expectations, except as required by law.

Источник: https://investor.foxcorporation.com/events/event-details/bank-america-merrill-lynch-2019-media-communications-entertainment-conference

Bull market to wind down next year, warns BofA Merrill Lynch

The long bull market cycle of excess stock and bond returns is expected to finally wind down next year, but not before one last hurrah, according to BofA Merrill Lynch Global Research in its outlook for the global markets and economy in 2019.

The bear market vibe at the end of 2018 is expected to continue, with asset prices finding their lows in the first half of 2019 once rate expectations peak and global earnings expectations trough. But BofA Merrill Lynch also forecasts a record high in earnings for the S&P 500 next year and plenty of upside potential for investors that make volatility their new best friend.

‘In our view, the current weakness in the markets is not a reflection of poor fundamentals. Rather, it’s caused by a confluence of idiosyncratic shocks that create very real risks for investors to be concerned about – but also opportunities for vigilant, well-positioned investors to pursue,’ says Candace Browning, head of BofA Merrill Lynch Global Research, in a statement.

For the year ahead, the research team forecasts modest gains in equities and credit, a weaker dollar, widening credit spreads and a flattening-to-inverted yield curve, signaling a tighter squeeze on liquidity that calls for higher levels of volatility. This comes against a backdrop of slowing ­– but still healthy – economic growth, mild inflation, except in the US where inflationary pressures are building, and a notable slowing in global earnings per share bank of america merrill lynch 2019 outlook growth from the torrid pace of 2017 and 2018.

Two big themes are expected to affect asset returns and the pace of economic growth in 2019: first, an unprecedented level of global monetary policy divergence as the US Federal Reserve continues to hike interest rates and other major central banks don’t, and second, whether a strong US economy decoupled from the rest of the world, particularly Europe and China, can be sustained.

The answer to that question could depend on big ebc gd high performance brake disc card risks in 2019: resolution of the trade war between China and the US, an EU political/economic crisis, and political gridlock in the US that could slow capital investments and deteriorate investor sentiment.

Analysts from the global research firm summarize their views on the market and make the following 10 macro calls for the year ahead. 

1.      Global profit growth declines: Earnings growth is expected to decline sharply next year, from more than 15 percent to less than 5 percent on a year-over-year basis. The BofA Merrill Lynch Research team is bearish on stocks, bonds and the US dollar, bullish on cash and commodities, and long on volatility. The investment bank expects to turn tactically risk-on in late spring, but edmond public schools oklahoma start first state bank in west union ohio with a bearish asset allocation of 50 percent stocks, 25 percent bonds and 25 percent cash.

2.      S&P 500 Index peaks: Earnings growth is also likely to slow in the US, though the near-term outlook remains somewhat positive. The S&P 500 Index is expected to peak at or slightly above 3,000 before settling in at a year-end target of 2,900. BofA Merrill Lynch forecast EPS growth of 5 percent, which would put the S&P 500 EPS at a record high of $170 next year. The investment bank’s US equity strategists are overweight healthcare, technology, utilities, financials and industrials, and underweight consumer discretionary, communication services and real estate.

3.      Cash gets competitive: For most of this long cycle, cash yields couldn’t hold a candle to more compelling asset class alternatives like stocks and bonds. With cash yields higher than dividend yields for 60 percent of the S&P 500 already, cash becomes even more competitive in 2019. BofA Merrill Lynch’s Fed call puts short rates close to 3.5 percent by the end of 2019, well above the S&P discover 5 year cd rates 1.9 percent dividend yield. Moreover, in a rising-rate environment, cash-generative investments have outperformed credit-sensitive assets. Given cash’s rerating, 2019 boils down to a strategy of buying sources of cash and selling users of cash.

4.      US economy slows as fiscal stimulus fades: Real US GDP growth of 2.7 percent is forecast for 2019, slowing in the second half of the year as the effects of fiscal stimulus begin to fade. The unemployment rate could reach a 65-year low of 3.2 percent by year-end, pushing wage growth of 3.5 percent in aggregate. Consequently, core price inflation should gradually rise to 2.2 percent through 2019 and hold as rates continue to rise. The housing market is no longer a tailwind for the Bank of america merrill lynch 2019 outlook economy: BofA Merrill Lynch believes housing sales have peaked and house price appreciation is forecast to slow.

5.      Global economic growth decelerates: The global economy is forecast to grow 3.6 percent in 2019, down slightly from 3.8 percent in 2018, wells fargo opportunity checking overdraft protection hovering around 3 percent. Most major economies are likely to see decelerating activity, with real GDP growth of 1.4 percent in both Europe and Japan, and 4.6 percent growth in aggregate among the emerging markets. Chinese growth is likely to further weaken early next year as a result of still-tight financial conditions and the US-China trade conflict. But a steady stream of monetary and fiscal stimulus measures to turn the economy around is expected.

6.      Global monetary policy divergence: Global monetary policy is expected to become less friendly in 2019. A divided government means additional fiscal stimulus in the US seems unlikely. Europe is largely frozen in place by its budget rules, and Japan appears ready to implement yet another ill-timed consumption tax hike. Further divergence in monetary policy between the Fed and other major central banks is expected to continue. BofA Merrill Lynch forecasts the Fed will hike rates four times in 2019, reaching a terminal funds rate of 3.25 percent-3.5 percent by year-end. Meanwhile, the European Central Bank and Bank of Japan are unlikely to raise policy rates meaningfully above zero for at least another two years.

7.      Credit cycle continues despite widening spreads and flattening curves: Globally, the credit markets face high levels of episodic volatility in 2019 with shrinking supply and quantitative tightening putting 25-50 basis points of upward pressure on investment-grade and high-yield bond spreads. In the US, total returns of 1.42 percent are forecast for high-grade corporate bonds and 2.4 percent for high yield. The US-leveraged loan market remains a bright spot in the credit spectrum, with total returns of between 4 percent and 5 percent. High-grade and high-yield corporate credit are expected to deliver total returns of 1 percent in Europe and, in Asia, 3 percent and 4.9 percent, respectively.

8.      Emerging markets: After a thank you for not smoking summary sell-off in 2018, emerging market assets are cheap and under-owned and could be a big winner in 2019 as the dollar weakens, yet emerging markets remain highly vulnerable to spillover effects of the US-China trade tensions. BofA Merrill Lynch is bullish on Brazil and expects its post-election rally to continue – and Russia is expected to improve as BofA Merrill Lynch believes sanction risk is priced in. Meanwhile, the outlook is bearish for Mexico, where credit rating downgrades are a concern and volatility surrounds policy changes under its new president.

9.      Foreign exchange volatility on a weaker dollar: The US dollar was the best-performing asset class in 2018, though most of the dollar gains appear to be in the past. A weaker dollar is expected in 2019 against a stronger euro and Japanese citi aadvantage login pay bill. BofA Merrill Lynch bank of america merrill lynch 2019 outlook the euro/US dollar and US dollar/Japanese yen to reach 1.25 and 105, respectively, at year-end. The strength of the dollar will depend heavily on the evolution of the trade relationship between China and the US, which in the short term may mean selling the dollar against a currency insulated from trade war rhetoric, such as the British pound and Swiss franc.

10.  Commodities modestly positive: The outlook for commodities is modestly positive despite a challenging global macro environment. BofA Merrill Lynch forecasts Brent and WTI crude oil prices to average $70 and $59 per barrel, respectively, in 2019. In metals, BofA Merrill Lynch remains cautious about copper because of Chinese downside risk. BofA Merrill Lynch also forecasts gold prices will rise to an average of $1,296 per ounce, but could go as high as $1,400, driven by US twin deficits and Chinese stimulus.

Источник: https://www.irmagazine.com/buy-side/bull-market-wind-down-next-year-warns-bofa-merrill-lynch

Merrill Edge Review

Merrill Edge is a financial platform owned by Bank of America. It offers access to online and advised investing, trading, brokerage, and banking services. Customers can be self-directed, work with advisors, or access portfolio management through Merrill Edge Guided Investing. In recent years, Bank of America has opened 600 new Merrill Edge investment centers (bringing the total to 2,800) and added 300 financial solutions advisors to its stable.

Since launching in 2010, Merrill Edge has offered a convenient way for investors to manage their banking and brokerage needs under one roof. Customers can take advantage of Bank of America'sPreferred Rewards program, which offers discounts like preferred pricing on Merrill Guided Investing accounts and discounts on ATM transactions, auto loan interest rates, and mortgage origination fees. The higher your average daily balance in your Bank of America and Merrill investment accounts, the better the perks—which means there is an incentive for Bank of America customers to open a Merrill Edge account.

Merrill Edge is a solid choice for long-term, DIY investors, especially those who already have a relationship with Bank of America. It's also a good choice for investors who want varying degrees of financial guidance. We'll look at Merrill Edge's features, costs, and resource quality to help you decide if it's the right fit for your investing style. Aside from this Merrill Edge broker review, we've also reviewed the Ways to pay american express bill Edge Guided Investing robo-advisor service.

Key Takeaways

  • Merrill Edge seamlessly connects the investing accounts and with the BoA banking experience.
  • Merrill Edge is cost competitive with $0 online stock and ETF trades with no account minimums.
  • Customers of Merrill Edge and BoA can access discounts and other perks through Bank of America's Preferred Rewards program.
  • Merrill Edge offers excellent fundamental research with proprietary and third-party research and stock ratings.

Who Merrill Edge Is For

Beginner and intermediate DIY investors will be well-served by Merrill Edge's technology and range of services. As an online brokerage, Merrill Edge offers a comprehensive platform with adequate technical and fundamental tools suitable for long-term investors and casual traders. As part of Bank of America's overall financial services universe, Merrill Edge offers perks (through the Preferred Rewards program), a seamless banking/investing experience, a wide variety of educational offerings, and strong in-person support.

Pros
  • Integrated with Bank of America

  • Robust proprietary and third-party research

  • No fees and no minimums for self-directed accounts

Cons
  • Narrow product line-up

  • Limited platform capabilities

  • Two-leg maximum on options strategies

Pros Explained

  • Merrill Edge's deep integration with Bank of America means customers can manage their banking and investing accounts under one roof—enjoying additional perks for doing so.
  • Merrill Edge integrates research from Morningstar and Lipper with its own research team to provide top-notch reports on individual stocks, news, and market commentary.
  • Merrill Edge has no account minimums and unlimited $0 online stock and ETF trades. Clients with at least $20,000 in combined deposit and investment accounts qualify for additional perks through the Preferred Rewards program.

Cons Explained

  • Merrill Edge supports stock, ETF, options, mutual fund, and fixed income trading, but it's missing some of the products that many active traders want, including futures, futures options, forex, and crypto. Investors looking for more advanced trading opportunities won't find them here. 
  • The Merrill Edge platform is suitable for casual DIY investors and traders. However, the lack of advanced order types and direct market routing—combined with a slow order entry interface—make it less suitable for active traders.
  • Options strategies on Merrill Edge are limited to two legs (many brokers offer at least four). The company states it will support four-leg strategies in 2021. 

Usability

It's simple to get started on Merrill Edge, especially if you're already a Bank of America customer. After logging on to the Merrill Edge website, you can view your account balances, portfolio performance, and market updates. Five tabs across the top of the screen—Accounts, Trade, Research, Guidance & Retirement, and Help & Settings—make it easy to find tools and resources. From the Trade tab, you can launch the MarketPro platform, which is available to all clients regardless of account size or activity. While the website isn't customizable, you can customize the layout and set trading defaults in MarketPro.

MarketPro and the Merrill Edge mobile app (available for Android and iOS) provide streaming real-time quotes and news, which you can view on multiple devices simultaneously. The app supports the same order types and, except for fixed income, the same asset classes as MarketPro. You can monitor, manage, and create new watchlists on the app and share them between the web and mobile app. However, MarketPro watchlists are saved to your local device instead of the cloud. Charting and research are available on both MarketPro and the app, and you can overlay a variety of technical indicators and drawing tools on either platform.

Trade Experience

The trading experience across Merrill Edge's platforms is straightforward and intuitive. MarketPro offers a decent amount of customization options, including color schemes, font size, layouts, alerts, trade defaults, and hotkeys. MarketPro users can right-click the chart and choose “buy” or “sell” at the current price. Web and mobile users can click the “Trade” icon in the chart header, which prefills the order ticket with the symbol information. Overall, our review found the MarketPro chart trading interface less elegant than what you may find on some other trading platforms. Still, it gets the job done, especially for retail traders with less complex needs.

MarketPro and mobile provide streaming real-time quotes, which you can view on multiple devices simultaneously. You can stage orders for later entry and enter multiple orders simultaneously. 

Mobile Trade Experience

You can't customize many features on the Merrill Edge mobile app. Still, it's well-designed and has most of the tools and resources you'll find on the desktop platform. The app doesn't support chart trading, but you can click the “Trade” icon in the chart header, which prefills the order ticket with the symbol information. Unlike MarketPro, you can't stage orders for later entry or enter multiple orders simultaneously on the app. You can filter which news feeds are displayed in the app just as you can online. As previously mentioned, watchlists created through the web platform are synced to the mobile app, but MarketPro watchlists are only on the computer running it.

Range of Offerings

Merrill Edge customers can trade stocks, ETFs, options, mini options, weekly options, binary options (new), mutual funds, CDs, Treasuries, municipal bonds, and corporate bonds. App traders are limited to stocks, ETFs, options, and mutual funds. Merrill Edge does not offer futures, futures options, forex, or cryptocurrency trading. Some international transactions can be made with the help of a live broker. Investors can trade the following with Merrill Edge, both on the website and MarketPro:

  • Stocks long and short. Merrill Edge's stock borrow process is fully automated for all short sale locates. It includes securities that have historically been on ETB lists and many others, and it can provide an instant locate when inventory is available.
  • OTCBB (penny stocks). There are certain restrictions in place that could limit OTCBB transactions based on market cap. 
  • Mutual funds (about 3,100 no-load, no transaction fee).
  • Bonds: corporate, municipal, treasury, CDs.
  • Single leg and two-leg options (with plans to introduce four-leg strategies in early 2021).
  • Robo-advisory integrated into the website and mobile app.
  • International trades via a live broker.

Order Types

Merrill Edge supports basic order types (e.g., market, limit, stop limit, trailing stop) across all platforms, but it doesn't offer the advanced conditional orders that active traders want. If you've been buying into a stock over time, you can choose the tax lot when you close part of the position—or you can set an account-wide default for the tax lot choice (such as average cost, last-in-first-out, etc.).

Trading Technology

Merrill Edge uses the Bank of America Merrill Lynch (BofAML) smart order router. The smart order router looks for displayed and reserve liquidity at hidden and visible venues at each price level up to the order's limit price. If an order becomes unmarketable, the router posts any residual quantity across multiple venues and redistributes residual posted share quantities dynamically as executions occur. Essentially the technology is approaching the process of filling an order by first seeking price improvement rather than execution speed. Merrill reports that 98.38% of orders are executed at better than the quoted price and the average execution speed is 0.018 seconds. Merrill Edge does not accept payment for order flow from market makers.

Despite boasting an advanced order router, Merrill Edge is limited beyond that. The broker doesn't support any simulated trading, backtesting, or automated trading capabilities.

Costs

Many brokers have shifted to commission-free trading stock and ETF trading, and Merrill Edge is no exception. It moved to $0 online stock and ETF trades in Oct. 2019. Otherwise, its fees are in line with the industry.

  • $0 commissions for online equity, ETF, and OTCBB trades. 
  • There is no per-leg commission on options trades. Per-contract commissions are $0.65. 
  • An order for 50 options contracts is $32.50. 
  • A covered call trade of 500 shares plus five contracts costs $3.25. 
  • Mutual fund trades for funds outside the No Transaction Fee program cost $19.95. 
  • Fixed income trades for secondary issues are $1 per bond. 
  • Margin interest ranges from 8.625% for a $10,000 balance to 7.5% for balances between $25,000 and $99,999 (as of September 2021). Rates for balance tiers $100k and above are not disclosed on the website.
  • No fees for inactivity, receiving wires, sending checks, or paper statements and trade confirmations. 
  • Sending a wire is $24.95 (domestic and international)
  • There is a $49.95 fee for fully transferring an account out. No fee for partial transfers.
  • Account closure fee is $49.95 for retirement accounts.
  • Broker-assisted trades are $29.95 per trade.

How This Broker Makes Money From You and for You

With fewer brokerages charging commissions these days, it's less obvious how they stay in business. Here are some of the behind-the-scenes ways Merrill Edge makes money from you—and for you.

  • Interest on cash: Merrill Edge makes money on the difference between what it pays you and what it can earn on your cash balances. You can opt for a bank deposit account or a money market account for your cash. It's automatically swept to earn an interest rate at least half of the Federal Funds rate. If you don't choose, you'll earn 0.01% on your cash balances.
  • Stock loan program: Merrill Edge earns money by loaning the stocks in your account for short sales. It does not share that revenue with you.
  • Payment for order flow: Merrill Edge does not accept payment for order flow (PFOF) from third-party market makers.
  • Price improvement: Merrill Edge's smart order router looks for quality trade executions. Customers achieve, on average, price improvement of $0.66 on orders of one to 99 shares, $3.98 on 100 to 499 shares, $11.51 on 499 to 1,999 shares, $19.95 on 2,000 to 4,999 shares, and $24.41 on 5,000 to 9,999 shares. For options, the net price improvement per contract is $0.084.
  • Portfolio margining: Merrill Edge does not offer portfolio margining, which can lower how much margin you need based on overall risk. In general, portfolio margining works best for customers who trade derivatives that offset the risk of their chase student loan requirements positions.

Account and Research Amenities

Merrill Edge has excellent fundamental research tools, including an impressive collection of proprietary and third-party research and stock rankings.

Stock Screener

Merrill Edge has a solid stock screener available on the "Research/Stocks" page. There are 29 prebuilt screeners—such as "Warren Buffett Stocks" and "Cash Cows"—or you can create your own using metrics like price, sector/industry, exchange, index, dividend yield, P/E ratio, market cap, and institutional ownership. Technical screeners are provided by Recognia, and you can save any screener to use later.

ETF Screener

There are two proprietary ETF screeners on the "Research/ETFs" page. You can search by product type, type of underlying investments, Morningstar rating, leverage/inverse, family, premium/discount, socially responsible, market cap, price, equity sector, performance, risk and portfolio assets, turnover, dividend, expense ratio, dividend yield, and management fees. Merrill Edge Select ETFs is a simplified screener with most criteria selected by Investment Management & Guidance Group of Merrill Lynch. Choose between “Domestic Equity”, “International Equity”, “Taxable or Non-Taxable Fixed Income”, and “Miscellaneous Fixed Income” groups to view matching funds.

Mutual Fund Screener

The "Research/Mutual Funds" page offers several easy-to-use screeners and information about available funds. No transaction fee (NTF) funds are bank of america merrill lynch 2019 outlook labeled as such, and the screeners include Morningstar and Lipper ratings, among other criteria. The Fund Story, introduced in 2019, helps you quickly evaluate mutual funds and ETFs, including holdings, costs, and ratings.

Options Screener

The “Research/Options” page has a screener where you can filter by basic option features or security fundamentals—or more advanced criteria like option value and volatility. Use the options strategy builder to find strategies that match your risk tolerance, outlook, and goals for symbols in your portfolio and watchlists. Merrill Edge's options chains let you search available contracts for specific optionable securities.

Fixed Income Screener

The “Research/Fixed Income” page includes a screener to filter bonds by type, industry, maturity date, price, yield, YTW, S&P rating, Moody rating, call info, and coupon rate. The Merrill Edge Select Funds tool screens five categories of funds, including “Domestic Equity”, “International Equity”, “Taxable Fixed Income”, “Non-Taxable Fixed Income”, and “International Fixed Income”. The interface is clunky compared to some of Merrill Edge's other screeners, but it gets the job done. 

Tools and Calculators 

Merrill Edge offers more than 24 tools and calculators for personal finance, retirement, college planning, and investing needs. Examples include the “Roth Costco ca san diego go card Conversion Calculator”, “Asset Allocator”, “Portfolio X-Ray”, and “Estate Tax Calculator”.

Trading Idea Generator 

Merrill Edge launched Idea Builder in August 2020. It lets you search for investment opportunities by ideas instead of traditional metrics like performance, sector, or individual companies. There are dozens of ideas—such as “Target Date Funds”, “Big Data”, “Millennials + Gen Z”, “Warren Buffett Stocks”, and “Climate Change Vulnerability”. The underlying research has been available on Merrill Edge for years, but Idea Builder combines it into a visual and personalized experience.

News 

Merrill Edge provides news from more than 30 sources, including Associated Press, BBC Newsfile, Boston Globe, Briefing.com, Business Wire, Canada Newswire, Chicago Tribune, Dow Jones, The Economist, Globe Newswire, Information Week, The Guardian U.K., Investor's Business Daily, Marketwired, The New York Times, Wall Street Journal, and the Xinhua News Agency. You can filter the news stream by holdings, watchlists, and preferred news outlets.

Third-Party Research

Merrill Edge has a searchable database on its website for six months' worth of analyst reports on about 1,500 equities. If you're a bond investor, you can read Municipals Weekly and the quarterly Fixed Income Digest. You'll find information about individual equities in the Stock Story feature, which pulls in data from dozens of sources. There is an emphasis on impact investing with MSCI environmental, social, and governance (ESG) scores on stock pages and in Stock Story, and Fund Story takes a similar look at mutual funds.

Charting

Merrill Edge MarketPro has full charting and customization capabilities with streaming real-time data. Choose from bar, line, OHLC, mountain, area plot, and candlestick charts, and a variety of tick and time-based charting intervals. There are more than 70 technical studies, all with customizable study parameters, and you have access to market depth data (Level II, open book, total view, ARCA, and TSX book).  The web and mobile platforms have limited charting capabilities but enough features for casual, long-term investors to trade on the go.

Cash Management

Merrill Edge allows you to enroll in a cash sweep program where your idle cash is automatically moved to a money market fund. If you don't choose to enroll, you'll earn 0.01% on your cash balances.

Dividend Reinvestment Plan (DRIP)

Merrill Edge clients can enroll dividend-paying stocks in a DRIP program.

SRI/ESG Research Amenities

As mentioned, Merrill Edge makes it easy for investors to evaluate their portfolio from a socially responsible investing (SRI) perspective. The MSCI ESG scores appear on stock pages and customers have access to 20,000 ESG ratings and reports and sector organizational displays of every ESG leader across the investing universe. You can view ESG ratings for your portfolios, along with ratings for individual stocks and funds within. 

Portfolio Analysis

Merrill Edge's portfolio analysis capabilities are excellent. Portfolio reports and analysis are available on an overnight basis. Portfolio Story is a proprietary tool that shows a complete breakdown of your portfolio, not only by sectors and holdings but also by performance, analyst ratings, and MSCI ESG scores. It's a valuable piece of portfolio analysis technology and should be especially helpful to new investors. You can isolate option portfolio performance via the Holdings by Product Class view.

Morningstar's Portfolio X-Ray is available on the website. It identifies how your holdings break down across various world regions (and if there is any overlap), shows how your investments are concentrated across 11 different sectors, and explains how your holdings are diversified across asset classes. MarketPro has its own customizable portfolio analysis tool.

Dynamic Insights, which launched in 2020, displays AI-driven insights and analysis on your holdings, accounts, and current market conditions. The reports adapt to portfolio and market changes in real-time. 

Balances, buying power, margin information, and internal rate of return are all updated in real-time. Despite the overall strength of the portfolio analysis tools, there are some gaps. There's no tool to help you figure out the tax impact of a planned trade, and the platforms do not include a trading journal, although you can attach notes to a symbol in your holdings or watchlists.

Education

Merrill Edge's Investor Education center opens with the question: "How do you like to learn?" You can pick an investing experience level (beginner, intermediate, or advanced) or a topic—such as investing & markets, stocks, ETFs, options, mutual funds, margin, and others. From homes for sale in north creek subdivision jacksonville fl, you can select your preferred learning format, whether that's articles, videos & webinars, courses, or calculators.

There's also the Merrill Edge Investing Classroom, powered by Morningstar. You can learn about various investment topics through a series of courses that go from basic to more sophisticated strategies. Course examples include “Modern Portfolio Theory”, “20 Stock-Investing Tips”, and “Using Morningstar's Ratings for Stocks”.

Customer Service

  • 24/7 phone line      
  • Online chat    
  • FAQs primarily focused on trading-related information 
  • You can speak with a live broker (there is a surcharge for any trades placed via the broker) and a financial advisor 
  • Non-U.S. residents cannot open an account  

Merrill Edge's phone line is available 24/7 for technical support and trading assistance. Calls start with an automated menu before being routed to a person, and Merrill Edge reports the average hold time is 90 seconds. Merrill Financial Solutions Advisors are available at Bank of America branches in most states for in-person assistance, or you can contact one via phone.

Security and Reliability

  • Biometric entry (fingerprint scanner or face recognition) for mobile devices.
  • Soft token for login and high-risk trade authorization available through text, phone, and email.
  • A device token is offered through the SafePass card for high-risk trade authorization.
  • Excess Securities Investor Protection Corporation (SIPC) insurance provided by Lloyd's of London. There is an aggregate loss limit of $1 billion. 
  • No significant breaches were reported by the Identity Theft Research Center during 2020.
  • Merrill Edge states it had no material platform outages during 2020. It also reports that during the last four years, Bank of America has not experienced any material losses or other material consequences related to technology failure, cyber attacks, or other information or security breaches. 
  • For additional information regarding cyber risks, interested customers can view the disclosure in Bank of America Corporation's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
  • Under the company's Fraud Protection Guarantee, Merrill Edge will reimburse you for "quantifiable monetary losses that occur in any of your Merrill Edge accounts due to unauthorized third-party activity."

Transparency

Merrill Edge's pricing page details self-directed trading fees and commissions, broken down by stocks & ETFs, options, mutual funds, and fixed income & bonds. You'll also find current margin rates, though you have to call for balance tiers $100k and above. If you scroll down, you can find additional fees and services by account type (investing, retirement, and education).

Our Verdict

Merrill Edge is a good choice for long-term investors, especially those who already have an account with Bank of America. The Preferred Rewards program offers discounts and perks that increase with your balance—so you could benefit by having deposit and investment accounts under the same roof. Merrill Edge offers high-quality proprietary and third-party research, a product line-up that should appeal to most investors, helpful customer service, an intuitive trading platform (MarketPro), and a solid mobile app.

Where Merrill Edge falls short is with the active trader crowd. The platform doesn't support advanced order types, you can't backtest or automate strategies, and there's no way to enter trades as fast as active traders would require. Also, the limited investment selection could be a deal-breaker for active traders who want access to futures, futures options, forex, or cryptocurrencies. If you don't need advanced platform capabilities and the product line-up suits your needs, Merrill Edge remains a solid choice as both a brokerage firm and a trading platform.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

Click here to read our full methodology.

Источник: https://www.investopedia.com/merrill-edge-review-4587910

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