Are we inching closer to the elusive “soft landing”? An increasing share of global fund managers sees it as the most likely outcome over the next 12 months:
Market
Prices as of 4 pm EST, 7/18/23
Macro
Here are some highlights from BofA’s latest Global Fund Manager Survey:
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Investors still expect global growth to weaken in the next 12 months.
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But only 48% predict a recession by the end of Q1 2024.
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In fact, most (68%) see a soft landing as the most likely outcome over the next year.
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Sentiment, however, is still stubbornly low.
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Investors expect the Fed’s first cut will come in Q2 2024.
June’s retail sales report revealed mixed signals about consumer strength.
Homebuilder confidence rose for the 7th consecutive month in July.
Redfin
Stocks
Microsoft (NASDAQ:MSFT) shares reached fresh all-time highs after the company announced new generative AI subscriptions for Microsoft 365.
Let’s turn back up on BofA’s Global Fund Manager Survey for some more insights:
Bank of America
Energy
According to a new International Energy Agency (IEA) report, global power demand is poised to grow just under 2% this year.
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That’s below the 5-year pre-pandemic average of 2.4%.
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In 2024, however, growth is expected to jump to 3.3% as global economies rebound.
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The agency predicts that next year—for the first time ever—renewable sources will account for more than 1/3 of the total global power supply:
IEA
Earnings
Yesterday’s highlights:
Bank of America (NYSE:BAC): $0.88 EPS (vs. $0.84 expected), $25.33 billion in sales (vs. $25.05B expected).
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A 14% jump in net interest income (in-line) drove an 11% gain in total revenue.
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The bank expects net interest income to expand by 8% for the year.
“We continue to see a healthy U.S. economy that is growing at a slower pace, with a resilient job market.”
- CEO Brian Moynihan
Morgan Stanley (NYSE:MS): $1.24 EPS (vs. $1.15 expected), $13.46 billion in sales (vs. $13.08B expected).
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The bank’s wealth management business posted record revenue, beating estimates with 16% growth fueled by higher interest income.
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As with others across the industry, its investment banking division disappointed.
“While we may not be quite at the end of rate increases, I believe we are very, very close to it.”
- CEO James Gorman
What we’re watching today:
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