CHIEF INVESTMENT OFFICE

Capital Market Outlook

April 29, 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—Fed Policy Still Appears Stimulative: The Federal Reserve’s (Fed) Chief Investment Office
monetary policy stance this year has been based on the premise that interest rates are Macro Strategy Team
restrictive and will thus bring inflation down enough to warrant lower rates. However,
MARKET VIEW 
domestic demand growth and inflation data have kept surprising to the upside, causing rate-
cut expectations to be pushed out into the future. Fed Chair Powell has been forced to admit Rodrigo C. Serrano, CFA®
that inflation is more of a problem than expected. Other Fed officials have also expressed Director and Senior Investment Strategist
unease about evidence of reaccelerating inflation.
THOUGHT OF THE WEEK 
The possibility that the Fed’s next move could be a rate hike has unsettled financial markets.
A stretch of intensifying geopolitical instability added to their discomfort with the prospect Joseph Quinlan
of higher-for-longer interest rates. Still, credit spreads have not widened. Also, while Equity Managing Director and Head of CIO Market Strategy
sector outperformance tilted more defensive recently, it has largely remained consistent Ariana Chiu
with late-cycle conditions and a still stimulative Fed policy. This suggests Equities are likely Wealth Management Analyst
experiencing just a normal correction. Nevertheless, a prudent investment approach is
MARKETS IN REVIEW 
recommended until the Fed resolves the inflation problem.
Market View—The Good, The Bad and On Watch: The Chief Investment Office’s (CIO) Data as of 4/29/2024,
more constructive portfolio posture reflects The Good: a strengthening of the and subject to change
fundamentals, including earnings and economic trends, which have helped support Equity
markets this year in the face of higher bond yields, in our view. The Bad: Stalling
disinflation in the U.S. has undermined expectations for easier monetary policy sooner. On Portfolio Considerations
Watch: Is inflation boosted further by the price of oil, fueled by geopolitical turmoil in the The economy shows early signs of
Middle East? This wildcard may factor in shaping the outlook from one eventually reaccelerating, consumers remain
resembling a synchronized global economic expansion to one instead hampered by worries healthy, corporate profits are turning
over stagflation. higher, and monetary policy is
Thought of the Week—Best to Hold Your Political Nose When Investing—We Explain: pivoting from tightening to easing.
While more than six months out from the election, we already detect a sense of fatigue We expect markets to take a small
and dread among investors. Uncertainty and volatility in an election year are not breather and enter a brief
uncommon—and this year will be no different. Watch for more uncertainty and volatility to consolidation phase as we enter the
creep into the market as we get closer to election day. “no fundamental news” period.
That said, we suggest that investors stay in the market. Don’t attempt to time the market, Weakness is a buying opportunity, in
and don’t let political preferences influence your investment strategies. Hold your political our view. We believe the broadening
nose, in other words. Since 1953, $1000 invested in the S&P 500 only when a Republican out of the market is just beginning.
was in the White House would be worth about $30,000 today. The same $1000 would be We maintain an overweight to
worth $56,000 if put to work under a Democrat occupying 1600 Pennsylvania Avenue. Equities, with a preference for higher-
However, if you stayed fully invested in the market regardless of the party in power, the quality U.S. Large- and Small-caps,
same $1000 would be worth $1.7 million. Being apolitical would have paid handsome and still favor a significant allocation
dividends, in other words. to bonds in a diversified portfolio. For
qualified investors, Alternative
Investments should be considered for
Chartered Financial Analyst® and CFA® are registered trademarks owned by CFA Institute. long-term growth and various sources
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Please see last page for important disclosure information. 6582060 4/2024
MACRO STRATEGY
Fed Policy Still Appears Stimulative
Chief Investment Office, Macro Strategy Team
Despite Fed Chair Powell’s insistence until recently that monetary policy is restrictive and
Investment Implications
interest rates can eventually be cut, the evidence suggests otherwise. For example, the Chicago
Fed’s financial conditions index is showing easier conditions today than when the Fed began Upside inflation surprises have
raising rates in March 2022. In fact, the index never showed tighter-than-average conditions started to trigger more interest in
during the current rate-hiking cycle. inflation hedges, such as gold,
Additionally, but related, the Fed, IMF, 1 and consensus estimates for growth and inflation have Energy and Materials stocks.
increased this year. Most recently, despite a softer-than-expected Q1 gross domestic product Strong nominal growth and higher
(GDP) print, the data show that U.S. domestic demand growth has remained strong at around a interest rates favor cyclical and
3% annualized pace. This has exceeded the economy’s potential growth, requiring higher Value stocks.
imports and a drawdown in inventories to satisfy demand, both drags on the headline GDP
print.
The underlying strength in domestic demand sets up economic activity for a stronger Q2 as
businesses rebuild inventories. This is supported by the latest Fed Beige Book, which shows
that the growth outlook has brightened significantly at the end of Q1. In fact, according to
Oxford Economics, the Beige Book Activity Index has reached a two-year high.
Stronger-than-potential domestic demand explains why inflation has also remained higher than
expected, jolting both financial markets and dovish Fed officials out of their comfort zone the
past month. Highly data-dependent and particularly sensitive to upside inflation surprises, Fed
officials have thrown cold water over plans to cut rates anytime soon. Interest-rate markets
have promptly unwound such expectations as well, rattling Equities in the process.
As a result, expectations of future stock market volatility, as measured by the VIX 2, perked up
somewhat. Still, the VIX has remained below average. Also, credit spreads have not widened,
consistent with a Fed policy that remains accommodative for nominal GDP and cash flow
growth across the economy.
The economic and financial market dynamics, combined with the possibility that the Fed’s next
policy move may still be a rate hike to bring inflation to its 2% target, suggest that the
economy is in the late-cycle stage of the expansion. Indeed, this phase of the business cycle,
which occurs before the economy enters a downturn, is typically characterized by several key
indicators that fit the present situation quite well:
• Low unemployment rates: Recent data show persistently strong labor demand. Employers
are still struggling to find qualified workers, and job openings remain elevated.
• Typically robust GDP growth, if slower from its peak: As noted above, economic
activity remains supported by strong consumer spending, solid government spending,
rapid investment in business intellectual property, and renewed gains in residential
investment. A need to rebuild inventories is likely to buoy growth in Q2.
• Asset Price Appreciation: Prices of assets such as stocks, real estate, and
commodities tend to rise in the late-cycle phase. Energy and materials price increases
are a typical late-cycle attribute, as the expansion erodes excess production capacity.
• Rising Inflation: Inflationary pressures have reaccelerated, as domestic demand for
goods and services has continued to outstrip supply, largely due to red-hot nominal
consumer income growth.
• Tightening Monetary Policy: Central banks tend to raise interest rates during the
late-cycle phase to cool growth and inflation. While the Fed has raised rates to their
highest levels in 20 years, policy has so far not been restrictive enough to prevent the
economy from overheating, as reaccelerating inflation indicates. Rate hikes may still
be needed to bring inflation to 2%.
• Increased Volatility: The risks of overheating and inflationary pressures increase
during this period. Financial markets tend to become more volatile as inflation worries,
monetary policy tightening, energy shortages and overseas economic tremors

1
International Monetary Fund.
2
Chicago Board Options Exchange Volatility Index (VIX).

2 of 8 April 29, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

 increase risk aversion. The late-cycle phase is a period of transition from strong
economic expansion to an eventual downturn.
• Yield Curve Flattening or Inversion: The yield curve, which reflects interest rates
across the maturity spectrum, tends to flatten or invert. An inverted yield curve, where
short-term rates are higher than long-term rates, is typically a warning signal of
recession. The yield curve inverted soon after the Fed started to raise rates and has
remained inverted for a record period ever since.
Equity-sector performance patterns also seem to concur, with typical late-cycle outperformers
(Energy, Industrials, Financials, Information Technology) topping the list in the year through
March. If policy had been truly restrictive, defensives, such as Healthcare, Utilities and Staples,
would likely have outperformed instead. The fact that Utilities and Consumer Staples have
outperformed over the past month likely reflects growing expectations that Fed policy may
need to finally become restrictive to quell inflation.
The consensus case that policy is already restrictive rests on the notion that the most
aggressive rate hikes in decades have pushed interest rates way above the “neutral rate” and
therefore put policy in a restraining mode. Yet the “neutral rate” is hypothetical. The economy
is not acting as if policy is a restraint on either growth or inflation, suggesting that the Fed
policy rate is not above the noninflationary “neutral rate” yet.
A similar disconnect between beliefs about policy restrictiveness and reality was evident
throughout the Great Inflation of the late 1960s and 1970s. The Fed kept raising rates to
higher and higher levels, yet inflation kept surprising to the upside. Pundits would cite the
historic level of rates as proof that policy was tight, yet inflation kept rising anyway. As shown
in Exhibit 1, the problem was that from the late 1960s (when inflation began to take off) until
the late 1970s (when Paul Volcker finally tightened policy enough to quell inflation), nominal
GDP growth trended much higher than the interest-rate structure of the economy. Basically,
although the Fed was raising rates, it was constantly behind the curve, allowing debt to be
serviced at higher and higher rates that kept lagging the cashflow growth in the economy.
Exhibit 1: Interest Rates Far Below Nominal GDP Growth = Very Stimulative.
% 10-Year Treasury Note Yield (16-quarter average)
16 Nominal GDP (16-quarter annualized growth)
14
12 Inflation Trend
Rising Inflation Trend
10 Declining Inflation
8 Trend Rising
6
4
2
0
1957 - Q1
1960 - Q1
1963 - Q1
1966 - Q1
1969 - Q1
1972 - Q1
1975 - Q1
1978 - Q1
1981 - Q1
1984 - Q1
1987 - Q1
1990 - Q1
1993 - Q1
1996 - Q1
1999 - Q1
2002 - Q1
2005 - Q1
2008 - Q1
2011 - Q1
2014 - Q1
2017 - Q1
2020 - Q1
2023 - Q1

f
Gray bars represent recessionary periods. Sources: Federal Reserve Board; Bureau of Economic Analysis. Data as of April 24, 2024.
This structurally stimulative policy environment shifted in the early 1980s, when the Fed finally
pushed rates well above the nominal GDP growth rate. This made it much harder to service
debt, thereby slowing the trajectory of money and credit growth. Inflation slowed as a result. In
other words, monetary policy only began to bite when nominal rates were well above nominal
GDP growth, as they persistently were throughout the 1980s and early 1990s.
This structurally restrictive regime ended with zero rates and quantitative easing following the
2008-2009 financial crisis. To allow reflation to take hold, this unorthodox policy held interest
rates well below nominal GDP growth rates for most of the past decade, setting off a new era
of structurally higher inflation. Seen in this context, Fed policy has remained quite stimulative
(Exhibit 1). In fact, over the past four years, the gap between nominal GDP growth and 10-year
Treasury yields has averaged higher than even during the 1970s.
In sum, the economy appears to be in the late cycle of the expansion, operating above potential
with elevated inflation. The fact that inflation is reaccelerating despite Fed tightening indicates
that monetary policy is not restrictive enough. The Fed’s next move may still be a rate hike if it
truly wants to bring inflation back to target.

3 of 8 April 29, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

MARKET VIEW
The Good, The Bad and On Watch
Rodrigo C. Serrano, CFA®, Director and Senior Investment Strategist
The Good: Strengthening Fundamentals Portfolio Considerations
For most of the year, the uptrend in benchmark borrowing costs has had a limited effect
Today’s more volatile landscape
on positive global Equity performance. We believe an improvement of the fundamental
resharpens a focus on maintaining
outlook has factored in this resilience. In the U.S., for the current reporting period, the S&P
a well-diversified portfolio.
500 is expected to produce a third consecutive quarter of profits growth on a year-over-
Addressing the potential for novel
year (YoY) basis. 3 Projected earnings of the index this year and over the next 12 months
challenges on this front, we view
have been rising, helping consolidate fully valued price-to-earnings multiples (Exhibit 2A). A
commodities and real assets as
driver of this progression has been robust consumption, which has fueled stronger
potential complementary long-term
forecasts for real GDP growth this year. These trends have led to the outperformance of
diversifiers, due to an emphasis by
cyclical sectors such as Energy and Industrials year-to-date. 4 Favoring these segments, we
government on resource, supply
believe a general broadening out of the Equity market advance is beginning. Meanwhile,
chain and military security; a
credit markets overall have also signaled fundamental strength.
gradual transition to a greener
A significant element driving growth has been a more dynamic supply side. Analysts have energy mix; and efforts to sustain
increasingly cited immigration as a contributor to an expanding labor force. Raising living standards amid large fiscal
consumption, this enlargement also improves the balance of supply/demand within the job imbalances.
market. Meanwhile, an example of the greater resilience of supply chains lies in the
national consequences of the collapse of the Francis Scott Key Bridge in Baltimore, which
has disrupted a major shipping port. Overall, industry experts believe a rerouting of
shipments to other landings can contain the fallout to the rest of the supply chain. With
experience from other major recent supply-side shocks, including the pandemic and the
Ukraine/Russia war, prepared logistical game plans to counter disruptions reflect the
effects of a management shift from “just in time” to “just in case.”

From a global perspective, alongside the U.S. economy—the world’s largest—India, ranked
fifth according to the World Bank, has also supported growth, expanding by over 8% on a
YoY basis for three consecutive quarters. Meanwhile, underpinned by a historically low
unemployment rate, the services sector in the euro area may be reaccelerating, according
to a widely followed S&P Global purchasing managers' index. Similar indicators in China
have also improved, while Q1 growth in GDP, at 5.3%, surpassed the consensus analyst
expectation. Overall, these developments suggest that a majority of the world’s other top
10 economies may be contributing to a more synchronized global upswing, an upside risk
to our outlook.

Reflecting this potential, commodity prices have stabilized. Copper, historically a

barometer of global economic health, has seen its price markedly appreciate. That of oil
has also risen in April to the highest since late October.

The Bad & On Watch

While attributable to the exceptional resilience of the U.S. economy, pricing pressures have
reemerged, delaying forecast interest rate cuts by the Fed. Moreover, heated tensions in
the Middle East have scrambled the signal for the outlook given by petroleum prices.
Instead of signaling fundamental strength, their rise may instead serve to tighten financial
conditions globally. The U.S. dollar has strengthened, which has raised policy concern in
other nations over less leeway to ease the weight of tight monetary policy on economic
growth (Exhibit 2B). This environment may also complicate stimulus efforts in China to
stabilize the real estate sector. Meanwhile in Japan, the yen’s depreciation has elicited
verbal warnings of intervention by policy officials, worried it could fan inflationary
pressures and worsen a cost-of-living backdrop and weak domestic demand. It may also

3
According to FactSet.
4
As of April 26, 2024.

4 of 8 April 29, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

compel the central bank to hike its policy interest rate. This could raise anticipation for a
repatriation of capital flows, spurring financial market volatility abroad.

In general, a scenario of higher-for-longer interest rates not fueled by genuine economic

strength risks heightening worries over public fiscal imbalances and crowding out private
capital. Aside from dampening buoyant investor optimism in prominent segments of
equity markets, tighter financing conditions risk intensifying uncertainty over the outlook
for commercial real estate and businesses with less resilient balance sheets, hampering
lending in the real economy.

Returning to geopolitics, on watch remains the U.S.-China relationship. Driven by domestic

considerations—a November election in the U.S. and economic weakness in China—token
steps to stabilize ties belie a strengthening by the U.S. of its export controls within a
broader battle for technological supremacy. Longer-run economic policy has also become
a notable irritant. Instead of bolstering consumption, a policy track urged by the U.S. and
other nations, China seems resolved to double down on export-oriented development as a
key economic growth pillar, leveraging its efficiency in manufacturing and its leadership in
emerging industries such as electric vehicles. This contention may spur protectionist acts
by countries seeking to protect domestic industry, arguing that China’s share of global
manufacturing already stands at a saturating 31%. 5 6 The risk of flashpoints related to the
South China Sea and North Korea also stands by.

In conclusion, the CIO’s more constructive portfolio posture reflects a strengthening

fundamental backdrop, which would bolster the team’s view of a long rotation in Equities
favoring U.S. Small-caps and Value-cyclical segments. Yet we’re carefully monitoring the
effect of tighter financial conditions on the economic outlook and the risk of geopolitical
shocks also upsetting expectations.

Exhibit 2: The Good: Improving Fundamentals. The Bad: Inflation pressures, Tightening Liquidity.

2A) After Dipping Initially, The Median Consensus 2024 Earnings 2B) Coinciding with rising oil prices, tempered expectations over the extent
Estimate For The S&P 500 Now Stands Above Its Level At The of the Fed's interest rate cutting cycle has fueled an appreciation of the
Beginning Of The Year. U.S. dollar.
245.00 WTI* oil price
Average annual estimated growth rate during: 135 S&P 500 0
WTI and U.S. dollar Indexed to 100 on

Number of 0.25% moves in policy

Number of Fed cuts (-) this year (rhs)
2024 Earnings per share estimate

January: 9.4% February: 9.4% March: 9.8% April: 10.0% 130 -1

244.00
125 -2
120
-3

interest rate
243.00
June 30, 2023

115
-4
110
242.00 -5
105
100 -6
241.00
S&P 500 Index - Analyst consensus estimate 95 -7
Estimate at Beginning of year (12/31/2023)
240.00 90 -8
6/30/2023
7/21/2023
8/11/2023
9/1/2023
9/22/2023
10/13/2023
11/3/2023
11/24/2023
12/15/2023
1/5/2024
1/26/2024
2/16/2024
3/8/2024
3/29/2024
4/19/2024
4-Feb-24
9-Feb-24
14-Feb-24
19-Feb-24
24-Feb-24
29-Feb-24

4-Apr-24
9-Apr-24
14-Apr-24
19-Apr-24
24-Apr-24
29-Apr-24
5-Mar-24
10-Mar-24
15-Mar-24
20-Mar-24
25-Mar-24
30-Mar-24
31-Dec-23
5-Jan-24
10-Jan-24
15-Jan-24
20-Jan-24
25-Jan-24
30-Jan-24

Exhibit 2A) Source: Bloomberg. Data as of April 26, 2024. Exhibit 2B) *West Texas Intermediate. Source: Bloomberg. Data as of April 26, 2024. Past performance is no guarantee of future
results. It is not possible to invest directly in an index. Please refer to index definitions at the end of this report.

5
“U.S.-China Tensions Fragmenting Trade and Investment, IMF Finds,” Bloomberg (April 8, 2024).
6
“Will Xi’s Manufacturing Plan be Enough to Rescue China’s Economy?,” Financial Times (March 27, 2024).

5 of 8 April 29, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

THOUGHT OF THE WEEK
It’s Best to Hold Your Political Nose When Investing—We Explain
Joseph Quinlan, Managing Director and Head of CIO Market Strategy
Ariana Chiu, Wealth Management Analyst
Investment Implications
When it comes to investing for the long term, making investment decisions along political
party lines is a great way to underperform the boarder market. That’s the clear message Politics matter but market
from Exhibit 3A. Since 1953, $1000 invested in the S&P 500 only when a Republican was fundamentals matter more when it
in the White House would be worth about $30,000 today. The same $1000 would be comes to determining long-term
worth $56,000 if put to work under a Democrat occupying 1600 Pennsylvania Avenue. market returns. Amid the swirl of
However, if you held your political nose and stayed fully invested in the market regardless election uncertainty, the CIO
of the party in power, the same $1000 would be worth $1.7 million. Being apolitical would continues to suggest that
have paid handsome dividends, in other words. portfolios remain diversified across
all asset classes, with an emphasis
We underscore this fact because November’s vote—while still more than six months on high quality. Use pullbacks as
away—continues to generate a great deal of interest and angst among investors. optimal market entry points.
Investors should not be surprised if a heightened sense of uncertainty and volatility creep
into the markets leading up to the election. It’s to be expected—it’s commonplace as
depicted by Exhibit 3B, which charts the contours of the VIX before and after presidential
elections.

Against this backdrop, investors should keep in mind some of the basic tenets of investing
in an election year: One, while election years are frequently associated with more
market volatility, U.S. Equities returns in election years (7.5% on average back to
1928 for the S&P 500) have not been all that different from non-election year
returns (8%), according to data from Bloomberg. Two, profits trump politics. Politics
matter to the markets, but the long-term driver of returns has been with company profits.
And three, amid the swirl of uncertainty, stay in the market—don’t try to time the
market or make major moves today in anticipation of changing course tomorrow.
Hold your nose, in other words.

Exhibit 3: Don’t Run or Hide from U.S. Elections—Stay Invested.

3A) Join the “Stay Invested” Party. 3B) Average VIX Performance in Election Years since 1990.
Value of $1000 Invested Since Eisenhower's 1953 Inauguration Indexed to 3 months before Election Day, 1990-2020
$1,800,000 $1.7 Million 160
$1,600,000 150
$1,400,000 140
$1,200,000 130
$1,000,000
120
$800,000
110
$600,000
100
$400,000
$200,000 90
$30,000 $56,000
$0 80
Only Republican Only Democrat Stay Invested -3 -2 -1 0 1 2 3 4 5 6

Exhibit 3A) Value calculated using S&P 500 daily total returns gross dividends. Sources: Bloomberg; Bespoke Investment Group. Data as of April 23, 2024. Exhibit 3B) Source: Bloomberg. Data as
of 2020 Election. It is not possible to invest directly in an index. Please refer to index definitions at the end of this report.

6 of 8 April 29, 2024 – Capital Market Outlook RETURN TO FIRST PAGE

MARKETS IN REVIEW

Equities
Total Return in USD (%) Economic Forecasts (as of 4/26/2024)
Current WTD MTD YTD 2023A Q1 2024A Q2 2024E Q3 2024E Q4 2024E 2024E
DJIA 38,239.66 0.7 -3.9 2.0 Real global GDP (% y/y annualized) 3.0* - - - - 2.9
NASDAQ 15,927.90 4.2 -2.7 6.3 Real U.S. GDP (% q/q annualized) 2.5 1.6 2.0 2.0 2.0 2.5
S&P 500 5,099.96 2.7 -2.9 7.4 CPI inflation (% y/y) 4.1 3.2 3.7 3.5 3.3 3.4
S&P 400 Mid Cap 2,895.24 2.1 -4.9 4.6 Core CPI inflation (% y/y) 4.8 3.8 3.6 3.6 3.5 3.6
Russell 2000 2,002.00 2.8 -5.7 -0.8 Unemployment rate (%) 3.6 3.8 3.9 3.9 4.0 3.9
MSCI World 3,335.08 2.5 -2.9 5.8 Fed funds rate, end period (%) 5.33 5.33* 5.38 5.38 5.13 5.13
MSCI EAFE 2,275.32 1.9 -2.9 2.8
MSCI Emerging Markets 1,041.52 3.8 0.0 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
year and can express upside/downside to these forecasts. Historical data is sourced from Bloomberg, FactSet, and
Fixed Income†
Haver Analytics. There can be no assurance that the forecasts will be achieved. Economic or financial forecasts are
Total Return in USD (%) inherently limited and should not be relied on as indicators of future investment performance.
Current WTD MTD YTD A = Actual. E/* = Estimate.
Corporate & Government 5.18 -0.12 -2.36 -3.06 Sources: BofA Global Research; GWIM ISC as of April 26, 2024.
Agencies 5.16 0.00 -0.96 -0.89
Municipals 3.77 -0.30 -1.31 -1.69
U.S. Investment Grade Credit 5.28 -0.08 -2.43 -3.19 Asset Class Weightings (as of 4/2/2024) CIO Equity Sector Views
International 5.71 0.03 -2.53 -2.92 CIO View CIO View
High Yield 8.13 0.60 -1.05 0.41 Asset Class Underweight Neutral Overweight Sector Underweight Neutral Overweight
slight over weight green

90 Day Yield 5.39 5.37 5.36 5.33 Global Equities    

slight over weight green

Neutral yellow
Energy    
2 Year Yield 4.99 4.99 4.62 4.25 U.S. Large Cap Growth     Healthcare
slight over weight green

   
10 Year Yield 4.66 4.62 4.20 3.88
Slight over weight green

U.S. Large Cap Value    

Consumer slight over weight green

30 Year Yield 4.78 4.71 4.34 4.03    

slight over weight green

U.S. Small Cap Growth     Discretionary

slight over weight green

U.S. Small Cap Value    

slight over weight green

Industrials    
Commodities & Currencies International Developed
Slight underweig ht orange

   
Information Neutral yellow

Total Return in USD (%)    

Neutral yellow

Emerging Markets     Technology

Commodities Current WTD MTD YTD slight underweig ht orange

Global Fixed Income     Communication Neutral yellow

Bloomberg Commodity 240.39 0.0 3.9 6.2 slight over weight green

Services
   
U.S. Governments    
WTI Crude $/Barrel†† 83.85 0.9 0.8 17.0 Slight over weight green Neutral yellow

U.S. Mortgages     Financials    

Gold Spot $/Ounce†† 2337.96 -2.3 4.8 13.3 Slight underweig ht orange

U.S. Corporates
Neutral yellow

    Real Estate    
Total Return in USD (%)
neutral yellow

International Fixed Income    

slight underweig ht orange

Utilities    
Prior Prior 2022
Slight underweig ht orange

High Yield    
Materials
slight underweig ht orange

   
Currencies Current Week End Month End Year End U.S. Investment-grade slight underweig ht orange

    Consumer
EUR/USD 1.07 1.07 1.08 1.10 Tax Exempt
underweight red

   
Staples
Slight underweig ht orange

USD/JPY 158.33 154.64 151.35 141.04 U.S. High Yield Tax Exempt    
USD/CNH 7.27 7.25 7.26 7.13 Alternative Investments*
Hedge Funds Neutral
S&P Sector Returns Private Equity Neutral
Real Assets Neutral
Information Technology 5.1% Cash
Consumer Discretionary 3.5% *Many products that pursue Alternative Investment strategies, specifically Private Equity and Hedge Funds, are available
Communication Services 2.7% only to qualified investors. CIO asset class views are relative to the CIO Strategic Asset Allocation (SAA) of a multi-asset
Industrials 1.8% portfolio. Source: Chief Investment Office as of April 2, 2024. All sector and asset allocation recommendations must be
Real Estate 1.6% considered in the context of an individual investor's goals, time horizon, liquidity needs and risk tolerance. Not all
Consumer Staples 1.6% recommendations will be in the best interest of all investors.
Utilities 1.2%
Financials 1.1%
Healthcare 0.7%
Energy 0.7%
Materials 0.7%
0% 1% 2% 3% 4% 5% 6%

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

4/22/2024 to 4/26/2024. †Bloomberg Barclays Indices. ††Spot price
returns. All data as of the 4/26/2024 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 29, 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.
S&P 500 Index is a market-capitalization-weighted index that is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers
approximately 80% of available market capitalization.
S&P 500 Price Return Index measures the value of the stocks of the 500 largest corporations by market capitalization listed on the New York Stock Exchange or Nasdaq. The intention of Standard
& Poor's is to have a price that provides a quick look at the stock market and economy.
S&P 500 Total Return Index is the investment return received each year, including dividends, when holding the S&P 500 index.
Chicago Fed’s financial conditions index is a weighted average of a large number of variables (105 measures of financial activity) each expressed relative to their sample averages and scaled by their
sample standard deviations.
Chicago Board Options Exchange Volatility Index/VIX is the ticker symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, a popular measure of the stock
market's expectation of volatility based on S&P 500 index options.
Beige Book Activity Index is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve Districts. It characterizes regional economic conditions and
prospects based on a variety of mostly qualitative information, gathered directly from each District's sources.
S&P Global purchasing managers' index is a survey-based economic indicator designed to provide a timely insight into changing business conditions in the goods-producing sector.
Bloomberg U.S. Dollar Index tracks the performance of a basket of 10 leading global currencies versus the U.S. Dollar.
West Texas Intermediate is the underlying commodity of the New York Mercantile Exchange's oil futures contract and one of the main global oil benchmarks.

Important Disclosures
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
This material does not take into account a client’s particular investment objectives, financial situations, or needs and is not intended as a recommendation, offer, or solicitation for the purchase or
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investment strategy and market views encompassing markets, economic indicators, asset classes and other market-related projections affecting GWIM.
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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
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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. 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
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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
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or estate planning strategy.
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