CHIEF INVESTMENT OFFICE

Capital Market Outlook

April 1, 2024

All data, projections and opinions are as of the date of this report and subject to change.

IN THIS ISSUE MACRO STRATEGY 

Macro Strategy—Is The Fed Pivot Reigniting Inflation?: The economic data have Robert T. McGee
remained mixed, causing a persistent and pronounced divergence of opinion among Managing Director and Head of CIO Macro Strategy
economists regarding the direction of inflation and appropriate level of interest rates. The Irene L. Peters, CFA®
Federal Reserve (Fed) has taken the position that inflation is likely to moderate enough to Director and Senior Macro Strategy Analyst
justify a more accommodative policy, however, spurring a significant easing of financial
conditions and increase in investor risk appetite. MARKET VIEW 
Lauren J. Sanfilippo
Its pivot from a tightening to easing policy bias late last year has stimulated stronger growth Director and Senior Investment Strategist
and higher inflation, encouraging the bull market in stocks to broaden out to cyclical sectors,
Joseph Quinlan
which lagged while the economy slowed down under the weight of high inflation and a year
Managing Director and Head of CIO Market Strategy
of rapid interest rate hikes. The pickup in growth over recent months has raised the profits
outlook for these cyclical sectors causing them to join the bull run. The shift to higher THOUGHT OF THE WEEK 
growth and inflation that the Fed acknowledged in its March 19 and 20 rate-setting meeting
continues to favor Equities over Fixed Income assets. Kirsten Cabacungan
Vice President and Investment Strategist
Market View—Four Charts on the CIO Radar Screen: As we flip the calendar page to a
new month and quarter, markets are generally supported by U.S. growth running at or MARKETS IN REVIEW 
above trend, and incremental earnings improvement seen since the corporate earnings
Data as of 4/1/2024,
recession last year. However, high on our radar screen that bears watching are the and subject to change
finances of the U.S. consumer, stress within the Commercial Real Estate (CRE) market, the
ongoing foreign appetite for U.S. securities, and the proliferation of global protectionism
and attendant risk to global earnings. We touch on each one of these dynamics. Portfolio Considerations

As portfolio ramifications over the past quarter, we’ve increased our exposure to Equities We expect global stocks to remain in
and warmed up to cyclical areas. The upgraded view comes courtesy of an economy an uptrend led by the U.S. as profits
showing early signs of reaccelerating, corporate profits that are turning higher, and a U.S. outperform, inflation rates continue
monetary policy stance pivoting from tightening to easing. to head slowly lower, and productivity
helps corporations maintain high
Thought of the Week—Quarterly Reflections: Q1 2024: U.S. Equities ended the first margins. We see the potential for
quarter strong. The S&P 500 notched a 9.5% gain for the quarter, breaking through 5200 tailwinds in Equities that may provide
for the first time ever in March. Positive fundamentals fueled Equity performance. additional upside. These include a
Resilient job creation and wage growth continued to fuel consumer spending. Corporate durable earnings recovery, equity fund
earnings came in better than expected for Q4 2023. Expectations for easier financial inflows, broadening market
conditions ahead picked up following a dovish signal from the Fed. Mega-cap Technology leadership, easier monetary policy,
stocks continued to drive the market for the quarter, but market breadth has improved and early indicators turning positive.
some which could help underpin the durability of the market uptrend. More market Bonds remain attractive and provide
reflections below. good diversification for multi-asset
class portfolios. For qualified
investors, Alternative Investments
Chartered Financial Analyst® and CFA® are registered trademarks owned by CFA Institute. should be considered for long-term
Trust and fiduciary services are provided by Bank of America, N.A., Member FDIC and a wholly owned subsidiary of
growth and various sources of yield
Bank of America Corporation (“BofA Corp.”). as a complement to public
Investment products: investments.
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
Please see last page for important disclosure information. 6512908 4/2024
MACRO STRATEGY
Is The Fed Pivot Reigniting Inflation?
Robert T. McGee, Managing Director and Head of CIO Macro Strategy
Irene L. Peters, CFA®, Director and Senior Macro Strategy Analyst
Since the Fed signaled the end of its tightening campaign in late 2023 and a shift to an Investment Implications
easing bias, equity markets have been off to the races around the world. Global stock The easier monetary policy the Fed
market indexes, such as the MSCI World Index, are up 25%, leading indicators have started is pursuing favors Equities over
to improve, measures of financial conditions have eased substantially, economic forecasts Fixed Income assets, which have
for gross domestic product (GDP) growth in 2024 have been rising, and inflation measures been losing value the past few
have picked up again (Exhibit 1). Both the three-month and six-month measures of the years in a higher inflation
consumer price index (CPI) and personal consumption expenditures (PCE) price index and environment. It also favors the
their “core” versions, which exclude food and energy for a better gauge of underlying stocks of cyclical companies that
inflation, bottomed around the time of the Fed’s pivot and have been rising more than lagged the big Technology leaders
expected in 2024. during the Fed’s 2022-2023
Exhibit 1: Inflation Reaccelerating Since Fed Pivot. tightening campaign.

Q4 Q4
48-month Latest 3-month Latest 6-month
average 3 months low 6 months low

Consumer Price Index (CPI) 4.66 3.99 1.91 3.20 2.99

CPI excluding food and energy 4.23 4.18 3.34 3.85 3.08

Personal Consumption Expenditure

4.00 3.39 0.61 2.51 2.05
(PCE) Price Index

PCE excluding food and energy 3.73 3.52 1.55 2.89 1.88

Sources: Bureau of Labor Statistics; Bureau of Economic Analysis/Haver Analytics. Data as of March 29, 2024.

At his press conference after the March 19 and 20 Federal Open Market Committee
(FOMC) meeting, Fed Chair Powell acknowledged this pickup but chose to downplay its
significance, saying, “January CPI and PCE numbers were quite high. There’s reason to
think that there could be seasonal effects…the February number was higher than
expectations…not terribly high.” In the end, despite raising its outlook for both growth and
inflation, and slightly lowering its unemployment rate forecast, the FOMC maintained its
outlook for three rate cuts in 2024. Mr. Powell acknowledged some risk that the higher
inflation in recent months could presage a stalling in the disinflation trend that the Fed
still hopes will continue, thereby justifying its rate cuts projections.

While the economic data have remained mixed enough to cause a persistent and unusually
pronounced divergence of opinion among economists regarding the direction of inflation
and the wisdom of a shift to lower interest rates, the Fed has thus chosen to believe that
inflation will continue to decline toward its 2% target. Its pivot to an easing bias has
resulted in a substantial easing of financial conditions that seems to have stopped the
economic slowdown and sparked a growth upswing. This is evident, for example, in the
latest Conference Board index of leading indicators (LEI), which, led by the surge in the
S&P 500 Index, rose in February for the first time in two years, a sign that the U.S.
economy is reaccelerating out of its post-pandemic slowdown phase. Also, the BofA Global
Research Global Wave indicator has troughed and started to pick up, as it always does
when global economic activity and the profits cycle start to rebound.

Fed erring on the side of easing was just what financial markets needed to promptly rise
to fresh records. As an important monetary policy transmission channel, the strong rise in
Equity prices is fueling rapid growth in household net worth and supporting a solid
consumer sector. Despite the slowing in home sales when mortgage rates soared in 2022,

2 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

home prices have also continued to rise faster than inflation, and housing activity has
stabilized and begun to pick up again. While households cannot tap much into their home
equity windfalls yet, the prospect of lower mortgage rates accompanying renewed Fed
easing points to significant potential consumer sector wherewithal and upside risks to
growth and inflation at much lower interest rates.

The positive performance of a broad array of risk assets is typical when nominal growth
expectations increase, the Global Wave rises, and the profits cycle turns back up. However,
widespread signs of a reaccelerating U.S. and global economy also increase the risk that
inflation might stall in the 3% to 4% range for the foreseeable future absent sustained
gains in the economy’s production potential from continued strong labor force and
productivity growth. For now, all four inflation measures shown in Exhibit 1 have averaged
about 4%, or more, over the past four years despite market-based measures of long-term
U.S. inflation expectations remaining “anchored” around 2%. The Fed’s pivot to an easing
bias with inflation still well above target has thus cast renewed doubts on its commitment
to the 2% target despite Mr. Powell’s protestations to the contrary. A constant under-
estimation of inflation was a feature of the 1970s’ environment as well.

The Fed’s substantial easing of the outlook for interest rates despite a strengthening
economy, full employment, and inflation still substantially above target explains why
inflation-hedge assets, such as gold, have broken out to new highs. As expectations for
rising earnings in an economy with stronger growth and higher inflation get priced in, the
Equities rally is also broadening out. Hopes for a cyclical economic upswing are starting to
be priced into the stocks that have lagged the big Technology leaders of 2023 that saw
their earnings take off last year on Artificial Intelligence (AI) expectations and the
implementation of efficiency measures that boosted their margins.

The cyclical laggards that were hurt by high interest rates and slower growth are now
beginning to reflect hopes for a stronger broad-based economic pickup, with robust
demand and rising pricing power. While AI is helping to propel a frenzy of valuation
excesses in the Technology sector, the prospect of its unquantifiable benefits spreading
into the wider economy opens the door to broader based “irrational exuberance” as long as
the Fed continues to accommodate the risk-asset demand its pivot to an easing bias has
already engendered. Basically, while the Fed claims that policy is restrictive and needs to
be eased, the markets are behaving as if policy is already accommodative.

Based on Mr. Powell’s signals, it appears that the game plan is to make sure that the
eventual problems of out-of-control deficits don’t materialize until well after the election.
The unprecedented use of deficit spending in a fully employed economy strengthens the
case for Equities over Fixed Income, which appears to have moved into a secular bear
market despite financial market hopes for much lower interest rates in the next two years.
Stronger growth and the highest inflation in 40 years have not been the traditional recipe
for sustainably lower interest rates. As the March 25, 2024, edition of the Wall Street
Journal notes on its front page, “Surging Treasury Sales Unnerve Investors: Annual issuance
has nearly doubled since Covid’s start, shows no signs of easing.” Since World War II, the
only strategy for reducing a bothersome debt burden has been to inflate it away. This
helps explain why U.S. Treasury bonds have been losing real value for five years.

3 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

MARKET VIEW
Four Charts on the CIO Radar Screen
Lauren J. Sanfilippo, Director and Senior Investment Strategist
Joseph Quinlan, Managing Director and Head of CIO Market Strategy
There was no stopping U.S. Equities in Q1 of 2024, with the Dow Jones Industrial Average, Investment Implications
Nasdaq and S&P 500 posting gains of the 6%, 9%, 10%, respectively. We see more upside Notwithstanding risks on our radar
ahead but are keeping a watchful eye on any potential air pockets or potholes for the market screen for both the U.S. and global
as Q2 begins. High on our radar screen: the finances of the U.S. consumer; stress within the
economies, our investment bias
CRE market; the ongoing foreign appetite for U.S. securities; and the proliferation of global
protectionism and attendant risk to global earnings. We briefly touch on each one of these remains tilted toward U.S. assets
dynamics below. and is predicated on early green
shoots seen in both improving
The U.S. Powerhouse-(holds). Personal consumption continues to power the U.S. earnings trends and a possible U.S.
economy, although U.S. consumers face numerous crosscurrents. Broad wage gains have economic reacceleration.
meant bigger paychecks helping to offset still-accelerating inflation pressures, while resilient
spending patterns have increasingly been paid for on plastic, notably among households with
lower incomes. Accordingly, some retailers reported shopper selectivity within their earnings
releases.
At the end of last year, credit card debt rose to $1.13 trillion. At the same time, interest rates
on credit cards are at a record high, sitting just below 23%, according to Bloomberg. Most
concerning, delinquency rates ticked up in Q4 2023 for all types of debt other than student
loans. 1 For the first time on record, interest payments on non-mortgage debts are as big a
financial burden as mortgage interest payments (Exhibit 2A). The ascent was fast—a more
than doubling of credit card expenses and fees since the start of the pandemic.
Exhibit 2: On Our Radar...
2A) Interest Payments for U.S. Households 2B) Offices Are the Most Distressed Property Type in the U.S.
$ Billions
Total Commercial Real Estate
700
Mortgage Payments
600 Office
Non-Mortgage Interest Payments
500 Apartment

400 Retail
300 Hotel
200 Industrial
Outstanding Distress
100 Others Potential Distress
0 0 50 100 150 200 250 300 350
Cumulative value of troubled assets by type
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024

2C) Holdings of U.S. Issues By Foreign Residents. 2D) Protectionism is Back: Global Trade Restrictions Triple.
$ Trillions Number of Trade Restrictions Imposed Worldwide
30 3,500
25 3,000
2,500
20
2,000
15
1,500
10 1,000
5 500
0 0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2009 2011 2013 2015 2017 2019 2021 2023

Exhibit 2A: Source: Bureau of Economic Analysis. Data through Q4 2023. Exhibit 2B: Outstanding distress (bankruptcy, default, tenant problems, other known issues), Potential distress
(delinquent repayments, forbearance, leasing problems, etc.) Sources: MSCI Real Assets; Bloomberg. Data as of March 2024. Exhibit 2C: Source: Federal Reserve Board. Data as of March 2024.
Exhibit 2D: Trade restrictions include restrictions on goods, services, and investment. Data for each year refers to restrictions implemented between January 1 and December 31. Source: Global
Trade Alert. Data as of March 25, 2024.
Consumers are increasingly normalizing by coming out of an abnormal period of rock-bottom
delinquencies and, generally, a time of financial stability. Underpinned by a strong labor
1
For balances considered “newly delinquent” by loan type. Source: New York Fed Credit Panel, data as of February
2024.

4 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

market, a rise in real wages and a strong stock market, U.S. consumption is expected to
remain solid near term, although rising interest/debt burdens bear close watching.
Commercial Real Estate’s Slow Burn. A workout process, a slow burn, a wildcard—
choose the phrasing. All eyes are on the potential fallout for CRE given higher-for-longer
interest rates, tumbling CRE values, and structural changes in the way people work. Signs of
commercial distress have percolated since last year, resulting in 3.5% of all office deals
involving a distressed seller based on MSCI estimates.
Offices accounted for 41% (or $35 billion) of the total value of distressed U.S. properties,
which stood at nearly $86 billion in real estate value as of December. Another $55 billion of
office real estate is categorized as “potentially distressed,” which refers to the erosion of an
asset’s current financial standing, at nearly $235 billion across all property types (Exhibit 2B),
according to MSCI.
Also ahead: Borrowers face refinancing at higher rates. It’s known that there are
$4.7 trillion in commercial/multifamily mortgages outstanding, according to the Mortgage
Bankers Association. As for this year, $929 billion is expected to mature, with multifamily
accounting for 27% of that total, while office accounts for another 22% of maturities
through year-end. Distorting the counts has been a pattern of “extend and pretend,” or
lengthening loan terms by extending maturities. The space bears watching—while
idiosyncratic events have cropped up over the last year, the relatively well-capitalized
banking system has resisted broader contagion.
Foreigners Continue To Prefer U.S. Assets, But For How Long? Foreign appetite for
U.S. securities (Treasurys, government agencies, corporate bonds and Equites) remains
robust, with foreign holdings of U.S. securities totaling a near-record high of $27 trillion at
the end of 2023 (Exhibit 2C). As a liquidity injection that helps fund everything from U.S.
mortgages to the servicing of U.S. federal debt, foreign capital inflows help grease the
wheels of both Main Street and Wall Street. Indeed, with America being one of the world’s
largest debtor nations, foreign inflows have always played an important role in U.S. finance.
Foreigners owned nearly 30% of U.S. marketable Treasurys, 12% of government agencies,
almost one-third of the corporate bond market and roughly one-fifth of U.S. Equities. Since
the beginning of the century, the foreign ownership of U.S. assets has increased more than
eight-fold, according to the Fed.
Foreign investors remain a critical and essential participant in the U.S. capital markets.
However, against a backdrop of rising U.S. trade and investment protectionism, the
weaponization of the U.S. dollar and U.S. financial system, capital controls in China and other
nations, and positive real interest rates in Japan, the largest holder of U.S. Treasurys—all of
these factors could result in a reduced foreign capital inflow in the near term and downward
prices on U.S. securities. Notably, at precisely the moment when the U.S. is clocking massive
federal budget deficits, the last thing Uncle Sam needs is for foreign investors to back out of
the Treasury market. The bottom line: Foreign capital inflows matter.
The Bull Market In Protectionism Is Bearish For Global Earnings. The shift toward
more globally managed trade is another metric we are closely watching. As Exhibit 2D
depicts, one characteristic of this decade is the bull market in protectionism, with the
number of trade restrictions imposed last year topping 3,000. That’s triple the level of 2019
and well above the average over the 2010 to 2019 period. Globalization isn’t dead, in our
opinion, but it is increasingly being wrapped up in a web of tariffs, trade barriers, investment
restrictions and related moves.
Leading the world down the protectionist path have been China and the U.S.—the globe’s
largest trading nations—spurring the rest of the world to follow suit with tit-for-tat trade
restrictions. Closely related to rising global trade barriers has been the marked increase in
investment protectionism—or increase barriers and regulations to foreign direct investment.
Thus far, many U.S. multinationals have done a respectable job of shifting and adjusting
global supply chains, although the more the world retreats from free trade and embraces
trade restrictions, the greater the risk to large-cap U.S. multinationals. Hence our continued
monitoring of the bull market in protectionism.

5 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

THOUGHT OF THE WEEK
Quarterly Reflections: Q1 2024
Kirsten Cabacungan, Vice President and Investment Strategist
U.S. Equities ended Q1 2024 strong. The S&P 500 notched a 10.2% gain for the quarter,
breaking through 5200 for the first time ever in March. The banner start to the year Portfolio Considerations
piggybacked the 2023 yearend rally, bringing the back-to-back quarters up a cumulative
We favor an overweight to
22.5%. Since 1950, when the S&P 500 gained in consecutive quarters with a combined
Equities, solid income from bonds,
advance of greater than 20%, Equities rose over the next 12 months 77.3% of the time
with an average return of 9.8% (Exhibit 3A). 2 and attractive cash flow from cash.
We have recently turned more
Positive fundamentals fueled the strong equity performance. Resilient job creation and favorable on cyclical areas of the
solid wage growth continued to support consumer spending. Better-than-expected market as they may be positioned
corporate earnings were also a catalyst. S&P 500 companies delivered a strong 4% to benefit if economic indicators
earnings beat for Q4 2023. 3 Analysts expect earnings to continue to accelerate this year
continue to show resiliency. But
with consensus estimates calling for 12% earnings growth for the S&P 500 in 2024. 4
we maintain a positive view on
Expectations for easier financial conditions also underpinned gains. The latest Fed
projections estimate a median of three rate cuts this year even amid some warmer both stocks and bonds overall, as
inflation signals recently. we continue to be mindful of the
potential for bouts of choppiness
Under the surface, mega-cap Technology stocks continued to drive the market, but market ahead as risks to the outlook
breadth has improved some. By the end of Q1, more than 80% of S&P 500 constituents
remain.
crossed above the 200-day moving average, which aside from a brief cross in January, marks
the first sustained period since 2021. Stocks have historically fared well when breadth
increased with the S&P 500 up 13.2% on average over the next 12 months. 5 From a sector
perspective, Communication Services dominated the quarter followed by Energy and
Information Technology, but Financials and Industrials also held up with both sectors
outperforming the broader index.. Small-caps still trailed Large-caps but could see further
support especially with a larger earnings growth rebound expected for the Russell 2000
compared to the S&P 500. Growth outperformed Value, but Value could be positioned to
catch up given the positive cyclical forces. From a global perspective, U.S. Equities led both
International Developed and Emerging Markets, though Japanese Equities staged a strong
rally following more optimism around improvements in Japan’s economy.
Exhibit 3: Banner Start to the Year For U.S. Equities.
3A) Back-to-back quarterly advances have led further gains. 3B) Improving market breadth tends to support the durability of the
market rally.
S&P 500 Price Return Percent of S&P 500 Constituents Above their 200-day Moving Average
(Consecutive quarters since 1950 with a cumulative advance greater than 20%) 100%
2-quarter Cumulative Advance >20%
45% 80% Threshold
12-month Forward Return
80%
Average 12-month Forward Return: 9.8%
30%
60%
15%
40%

0% 20%

-15% 0%
*
1954
1958
1961
1970
1975
1975
1976
1980
1982
1983
1986
1987
1987
1991
1997
1999
2009
2009
2010
2012
2020
2020
2024

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

*Estimate. Exhibit 3A: Source: Bloomberg. Data as of March 28, 2024. Exhibit 3B: Source: Bloomberg. Data as of March 28, 2024

Fixed Income came under pressure during the quarter, with the Bloomberg U.S. Aggregate
Bond Index lower 0.8%. Yields on the 2-year and 10-year U.S. Treasury climbed in the first
few months as questions swirled around delays to Fed rate cuts.
Bottom line: Upside surprises to the economy supported a banner start to the year for U.S.
Equities. Volatility risks remain, but positive momentum is building for this uptrend to continue,
in our view.

2
Bloomberg. Data as of March 28, 2024.
3
BofA Global Research. March 12, 2024.
4
FactSet. Data as of March 28, 2024.
5
Reflects previous instances since 1990 when the percent of S&P 500 constituents above the 200-day moving
average flipped above 80% for the first time in three months. Source: Bloomberg. Data as of March 28, 2024.

6 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

MARKETS IN REVIEW

Equities
Total Return in USD (%) Economic Forecasts (as of 3/28/2024)
Current WTD MTD YTD 2023A Q1 2024A Q2 2024E Q3 2024E Q4 2024E 2024E
DJIA 39,807.37 0.8 2.2 6.1 Real global GDP (% y/y annualized) 3.1* - - - - 2.9
NASDAQ 16,379.46 -0.3 1.8 9.3 Real U.S. GDP (% q/q annualized) 2.5 2.5* 2.0 2.0 2.0 2.7
S&P 500 5,254.35 0.4 3.2 10.6
CPI inflation (% y/y) 4.1 3.2* 3.4 3.2 3.0 3.2
S&P 400 Mid Cap 3,046.36 1.9 5.6 10.0
Core CPI inflation (% y/y) 4.8 3.8* 3.5 3.5 3.3 3.5
Russell 2000 2,124.55 2.6 3.6 5.2
Unemployment rate (%) 3.6 3.8* 3.8 3.9 3.9 3.9
MSCI World 3,437.76 0.4 3.2 8.9
Fed funds rate, end period (%) 5.33 5.33* 5.13 4.88 4.63 4.63
MSCI EAFE 2,349.42 0.1 3.3 5.8
MSCI Emerging Markets 1,043.20 0.5 2.5 2.4 The forecasts in the table above are the base line view from BofA Global Research. The Global Wealth & Investment
Management (GWIM) Investment Strategy Committee (ISC) may make adjustments to this view over the course of the
Fixed Income† year and can express upside/downside to these forecasts. Historical data is sourced from Bloomberg, FactSet, and
Total Return in USD (%) Haver Analytics. There can be no assurance that the forecasts will be achieved. Economic or financial forecasts are
Current WTD MTD YTD inherently limited and should not be relied on as indicators of future investment performance.
A = Actual. E/* = Estimate.
Corporate & Government 4.76 0.23 0.88 -0.72
Sources: BofA Global Research; GWIM ISC as of March 28, 2024.
Agencies 4.79 0.09 0.46 0.08
Municipals 3.49 -0.16 0.00 -0.39
U.S. Investment Grade Credit 4.85 0.23 0.92 -0.78 Asset Class Weightings (as of 3/5/2024) CIO Equity Sector Views
International 5.30 0.25 1.29 -0.40 CIO View CIO View
High Yield 7.66 0.10 1.18 1.47 Asset Class Underweight Neutral Overweight Sector Underweight Neutral Overweight
90 Day Yield 5.36 5.36 5.38 5.33 Equities
slight overweight green

   
slight overweight green

Energy    
2 Year Yield 4.62 4.59 4.62 4.25 Slight overweight green

U.S. Large-cap    
slight overweight green

10 Year Yield 4.20 4.20 4.25 3.88 Slight overweight green

Healthcare    
U.S. Mid-cap    
Consumer
30 Year Yield 4.34 4.38 4.38 4.03 slight overweight green
slight overweight green

   
U.S. Small-cap     Discretionary
Slight underweight orange

International Developed    
slight overweight green

Commodities & Currencies Neutral yellow

Industrials    
Emerging Markets    
Information
Total Return in USD (%) slight underweight orange
Neutral yellow

   
Fixed Income     Technology
Commodities Current WTD MTD YTD
U.S. Investment- neutral yellow

Communication
Bloomberg Commodity 231.40 0.9 3.3 2.2    
Neutral yellow

   
grade Taxable Services
WTI Crude $/Barrel†† 83.17 3.2 6.3 16.1 neutral yellow

International     Neutral yellow

Gold Spot $/Ounce†† 2229.87 3.0 9.1 8.1 Slight underweight orange
Financials    
Global High Yield Taxable     Neutral yellow

U.S. Investment-grade Real Estate    

Total Return in USD (%)
slight underweight orange

   
Tax Exempt
slight underweight orange

Prior Prior 2022 Slight underweight orange

Utilities    
Currencies Current Week End Month End Year End U.S. High Yield Tax Exempt     slight underweight orange

Materials    
EUR/USD 1.08 1.08 1.08 1.10 Alternative Investments*
Consumer underweight red

Hedge Funds
Neutral

   
USD/JPY 151.35 151.41 149.98 141.04 Staples
Private Equity
Neutral

USD/CNH 7.26 7.28 7.21 7.13

Tangible Assets /
Neutral

Commodities
S&P Sector Returns Real Estate
Neutral

Cash
Utilities 2.9%
*Many products that pursue Alternative Investment strategies, specifically Private Equity and Hedge Funds, are available
Real Estate 2.4% only to qualified investors. CIO asset class views are relative to the CIO Strategic Asset Allocation (SAA) of a multi-asset
Energy 2.2% portfolio. Source: Chief Investment Office as of March 5, 2024. All sector and asset allocation recommendations must be
Financials 1.7% considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all
Materials 1.7% recommendations will be in the best interest of all investors.
Healthcare 1.6%
Consumer Staples 1.0%
Consumer Discretionary 0.7%
Industrials 0.6%
Communication Services -0.8%
Information Technology -1.3%
-2% -1% 0% 1% 2% 3% 4%

Sources: Bloomberg; Factset. Total Returns from the period of

3/25/2024 to 3/28/2024. †Bloomberg Barclays Indices. ††Spot price
returns. All data as of the 3/28/2024 close. Data would differ if a
different time period was displayed. Short-term performance shown
to illustrate more recent trend. Past performance is no guarantee
of future results.

7 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

Index Definitions
Securities indexes assume reinvestment of all distributions and interest payments. Indexes are unmanaged and do not take into account fees or expenses. It is not possible to invest
directly in an index. Indexes are all based in U.S. dollars.
U.S. Equities/S&P 500 Index is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.
MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries.
Consumer price index is a price index, the price of a weighted average market basket of consumer goods and services purchased by households.
Personal consumption expenditures price index measures changes in consumer spending on typical goods and services.
Conference Board index of leading indicators is an American economic leading indicator intended to forecast future economic activity.
Dow Jones Industrial Average Index is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
Nasdaq Composite Index is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange.
Treasury/Bloomberg US Treasury Index measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury.
Government Agencies/Bloomberg U.S. Agency Index measures the performance of the agency sector of the U.S. government bond market.
Corporate Bonds/Bloomberg US Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market.
Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index.
Bloomberg Aggregate Bond Index broadly tracks the performance of the U.S. investment-grade bond market.

Important Disclosures
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Bank of America, Merrill, their affiliates and advisors do not provide legal, tax or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of
America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (“CIO”) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions
oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
The Global Wealth & Investment Management Investment Strategy Committee (“GWIM ISC”) is responsible for developing and coordinating recommendations for short-term and long-term
investment strategy and market views encompassing markets, economic indicators, asset classes and other market-related projections affecting GWIM.
BofA Global Research is research produced by BofA Securities, Inc. (“BofAS”) and/or one or more of its affiliates. BofAS is a registered broker-dealer, Member SIPC and wholly owned subsidiary of
Bank of America Corporation.
All recommendations must be considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the best interest of all
investors.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the
companies or markets, as well as economic, political or social events in the U.S. or abroad. Small cap and mid cap companies pose special risks, including possible illiquidity and greater
price volatility than funds consisting of larger, more established companies. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers,
possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice
versa. Income from investing in municipal bonds is generally exempt from Federal and state taxes for residents of the issuing state. While the interest income is tax-exempt, any
capital gains distributed are taxable to the investor. Income for some investors may be subject to the Federal Alternative Minimum Tax (AMT). Treasury bills are less volatile than
longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government. Bonds are subject to interest rate, inflation and credit
risks. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other
developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of
diversification and sector concentration. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic
conditions on real estate values, changes in interest rates, and risk related to renting properties, such as rental defaults. There are special risks associated with an investment in
commodities including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors.
Alternative investments are speculative and involve a high degree of risk.
Alternative investments are intended for qualified investors only. Alternative Investments such as derivatives, hedge funds, private equity funds, and funds of funds can result in higher return
potential but also higher loss potential. Changes in economic conditions or other circumstances may adversely affect your investments. Before you invest in alternative investments, you should
consider your overall financial situation, how much money you have to invest, your need for liquidity, and your tolerance for risk.
Nonfinancial assets, such as closely held businesses, real estate, fine art, oil, gas and mineral properties, and timber, farm and ranch land, are complex in nature and involve risks including total loss
of value. Special risk considerations include natural events (for example, earthquakes or fires), complex tax considerations, and lack of liquidity. Nonfinancial assets are not in the best interest of all
investors. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax,
or estate planning strategy.
© 2024 Bank of America Corporation. All rights reserved.

8 of 8 April 1, 2024 – Capital Market Outlook RETURN TO FIRST PAGE