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BofA Merrill Lynch Global Research – A US Economics Report – Wednesday, 22 May 2013
Bernanke, minutes say low chance of imminent QE change The markets got a double dose of Fed views today, with Chairman Bernanke testifying before Congress in the morning and the May FOMC minutes released during the afternoon. The bottom line from both, in our view, is that the Fed is not yet ready to start [...]
BofA Merrill Lynch Global Research – A US Economics Report – Thursday, 16 May 2013
Energy pulls down headline, core weak The April consumer price report revealed broad-based weakness in inflation. The headline fell -0.4% monthly (versus -0.3% consensus and -0.2% BofAML) largely due to gasoline prices. Core CPI was also weak, barely up 0.1% (versus 0.2% consensus, 0.1% BofAML) with most categories soft. Overall, annual headline CPI inflation is [...]
BofA Merrill Lynch Global Research – A Research Investment Committee Report – Tuesday, 14 May 2013
Fed buys quality, investors buy risk In our view, the forces driving the long-term improvement in US equity prices remain in place: the economy is growing modestly, the market is still undervalued by some metrics, and central banks are pouring in liquidity. Still, especially in light of the 15% YTD total return in the S&P, [...]
BofA Merrill Lynch Global Research – A US Economics Report – Friday, 03 May 2013
Better than expected employment report in April The economy added 165,000 jobs in April while the prior two months were revised to show an additional 114,000 jobs. The unemployment rate fell to 7.5% as household jobs increased 293,000 while the labor force increased 210,000. Splashing a bit of cold water on the report, the private [...]
BofA Merrill Lynch Global Research – A US Economics Report – Wednesday, 01 May 2013
Fed buys itself time In an implicit acknowledgment of the softening data, the FOMC today explicitly indicated that it is “prepared to increase or reduce the pace of purchases” as the labor market and/or inflation outlooks change. Several Fed officials in the week prior indicated their willingness to ease if data disappoint persistently. With the [...]
BofA Merrill Lynch Global Research – A US Economics Report – Tuesday, 30 April 2013
A transitional FOMC meeting Fed officials began this fourth straight year expecting to be able to pull back soon on the amount of monetary accommodation. And for the fourth straight year, the data once again are disappointing. Not only are growth and employment undershooting the Fed’s forecasts, but inflation has continued to decelerate sharply. The [...]
BofA Merrill Lynch Global Research – A US Economics Report – Friday, 26 April 2013
Underlying growth slows in Q1 The GDP report was disappointing with headline growth of only 2.5% in Q1 (consensus: 3.0%) following meager 0.4% growth in Q4. Much of this swing owed to inventories which added 1.0pp to growth in Q1 after slicing 1.5pp in Q4. Final sales, which are a measure of underlying demand, slowed [...]
BofA Merrill Lynch Global Research – A US Economics Report – Tuesday, 16 April 2013
CPI inflation declines to 1.5% CPI inflation surprised to the downside at -0.2% monthly in March (versus flat for consensus and -0.1% BofAML), as energy prices continued to fall. This pulled the year-on-year inflation rate down to 1.5% from 2.0% in February. Core CPI also came in soft, as we warned it might: prices excluding [...]
BofA Merrill Lynch Global Research A US Economics Report – Friday, 05 April 2013
Disappointing jobs report The economy only added 88,000 jobs in March, significantly below consensus expectations of 190,000. The unemployment rate fell to 7.6%, not because of stronger job growth, but because of fewer people searching for work. We believe this report likely kicks off a series of weaker data to come. We expect job growth [...]
BofA Merrill Lynch Global Research A Research Investment Committee Report – Tuesday, 09 April 2013
Is it too late to jump in? It may be riskier to stay out The S&P 500 and Dow indexes recently bumped up against their all time highs. By many key metrics, the market is undervalued compared to the last two times the S&P index was at current levels. And the alternatives are much less [...]