The Era of Transformation Part One

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.

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

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