Report published May 12, 2026
The Era of Transformation Part One: Merrill Investment Strategy Outlook (May 2026)
Merrill A Bank of America Company · May 12, 2026
The Merrill CIO remains overweight Equities, particularly in the U.S. and Emerging Markets, citing a robust 2026 earnings outlook and a supply-driven economic transformation. Despite geopolitical risks and range-bound yields, episodic volatility is viewed as a buying opportunity.
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Finvaulta summarizes Merrill A Bank of America Company's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.Maintain an overweight position in Equities, specifically favoring U.S. Equities due to robust earnings momentum and the AI infrastructure build-out.
- 2.Expect double-digit earnings growth for the S&P 500 in 2026, supported by resilient fundamentals despite headline risks.
- 3.Underweight Fixed Income position to fund Equity overweight, while maintaining neutral duration given sticky inflation and stable GDP growth.
Table of Contents
- IN BRIEF
- CIO ASSET CLASS VIEWS
- CIO INVESTMENT DASHBOARD AS OF MAY 5, 2026
- EQUITIES
- EQUITY WATCH LIST
- FIXED INCOME
- FIXED INCOME WATCH LIST
- ALTERNATIVE INVESTMENTS
- MACRO STRATEGY
- ECONOMIC FORECASTS (AS OF 5/1/2026)
- S&P 500 SCENARIOS BASED ON FORWARD P/E AND 2026 EARNINGS PER SHARE (EPS)
- CIO ASSET CLASS VIEWS AS OF MAY 5, 2026
- CIO EQUITY SECTOR VIEWS AS OF MAY 5, 2026
- CIO THEMATIC INVESTING AS OF MAY 5, 2026
Report data
S&P 500 SCENARIOS BASED ON FORWARD P/E AND 2026 EARNINGS PER SHARE (EPS)
| Metric | Estimate | Context |
|---|---|---|
| S&P 500 Index Level | 7,000 points | Market recovery from March correction. |
| Real U.S. GDP | 2.2% | Annualized growth forecast for full year 2026. |
| Oil Price | 100 USD/barrel | Impact of Middle East military campaign. |
| Fed Funds Rate (End Period) | 3.13% | Forecasted year-end rate from current 3.63%. |
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