“History suggests that some of the best returns can come at the end of bull markets. With valuations and sentiment as high as they are, amid relative economic calm despite political turmoil, we view a pullback in the market this year as an expected norm. And for well-positioned investors, it could very well be a buying opportunity," said Candace Browning, head of BofA Merrill Lynch Global Research.
In our 2018 Year Ahead Outlook, BofA Merrill Lynch Global Research analysts across Market Outlook & Investment Strategy, U.S Economics and Rates, FX & Emerging Markets share key themes and views for 2018.
MARKET OUTLOOK & INVESTMENT STRATEGY
"In 2018, markets will continue to be driven by two primary forces…interest rates…and corporate profits."
Chief Investment Strategist, BofA Merrill Lynch Global Research
- Wage inflation picks up
- Corporate profits grow less robustly
- Trends to watch: tech, demographics and geopolitics
"We think the labor market will tighten further. That...should lead to stronger wage growth, which ultimately helps to boost overall price inflation."
Head of U.S. Economics, BofA Merrill Lynch Global Research
- Tax reform provides short-term stimulus
- Fed looks to bring interest rates higher
- Accelerating inflation
- Midterm elections a variable in setting policy
RATES, FX & EMERGING MARKETS
"A combination of slowing Chinese growth, a stronger dollar and higher U.S. rates……are going to be a problem for emerging markets."
Head of Global Rates, FX and EM Fixed Income Strategy & Economics, BofA Merrill Lynch Global Research
- Repatriation leads to higher USD
- Emerging markets face significant headwinds
- Global bond surplus a possibility