Must Read Research
March 1, 2026
Candace Browning, Head of BofA Global Research
As Keynes observed: "Successful investing is anticipating the anticipations of others". This week we look at where some big changes are unfolding: a regime pivot in the second half of the 2020s, signs of a broadening global recovery, pushback against AI doomsday narratives, and a shifting media landscape that could contribute to what could prove to be a costly media rights renegotiation.
In the 7th edition of The Longest Pictures, Chief Investment Strategist Michael Hartnett argues that the world is in the midst of a regime shift, with major political, geopolitical, and financial events redefining asset allocations.
He sees a "Big Change" underway: from globalization to nationalism, inequality to affordability, Fed independence to deference, asset-light tech to an AI-driven capex cycle, and services dominance to manufacturing. These transitions, in his view, will shape new leaders in the second half of the 2020s. Michael favors commodities, emerging market equities, and small caps. At the same time, he flags government bonds as a deeply contrarian opportunity after enduring the worst bond bear market in U.S. history since 1H 2020. The peak-to-trough price of the 30-year U.S. Treasury has collapsed 54% and the 30-year Japanese Government Bond is down 45%.
Our Global Wave indicator turned positive, signaling that the global economic cycle is strengthening after a period of disruptive economic trends.
Chief Global Quantitative Strategist Nigel Tupper observed that historically, a trough in the Global Wave has been a reliable risk-on signal, followed by broad-based equity outperformance across regions, sectors, and styles. After prior troughs, the MSCI AC World Index delivered a median 12-month return of 16.5%. While market breadth has been narrow over the past 10 months due to concentrated themes, the recent upturn points to a more synchronized global recovery, with cyclicals poised to benefit. Nigel notes that opportunities are shifting from traditional sector calls to targeted themes with strong triple momentum and low fund ownership. He flags gold, rare earths, robotics, and quantum computing as potential beneficiaries as investor positioning adjusts.
Concerns that AI could trigger widespread job losses have intensified this week, but Head of Global Economics Claudio Irigoyen argues the doomsday narrative is internally inconsistent.
If AI represents a genuine technological breakthrough, it should function as a positive supply shock (i.e., lower costs, reduced prices, and expand profit margins for adopters). History suggests that displaced labor can be redirected and lower costs can unlock previously uneconomic business models. The industrial and internet revolutions followed this pattern. Agriculture once represented 40% of U.S. employment while it's just 1% today. Claudio notes that AI may compress the labor IQ premium while elevating the value of emotional intelligence (EQ), as humans are moved into tasks that involve judgment, trust, and interaction. He views recent AI sell-offs less as a coherent macro thesis and more as a positioning dynamic. Akin to a rumor-driven bank run, where sentiment shifts can spark selling simply because others may sell. As the narrative fails to materialize, markets should revert to equilibrium.
Press reports suggest the NFL is seeking to renegotiate its media rights packages.
This follows several years of strong viewership and rights inflation across major sports. Given the NFL's "must-have" status — accounting for 70 of the top 100 broadcasts in recent years — broadcasters have limited bargaining power. In addition, the buyer pool is expanding as well-capitalized tech players express growing interest. Assuming a 50% increase in average annual value (AAV) with no change in underlying inventory, Jessica Reif Ehrlich sees material headwinds for media and television broadcasting stocks in her coverage. The alternative to paying up is losing rights altogether and risk accelerating audience erosion and weakening affiliate and retransmission leverage.
Featuring Commentary from Global Economics Weekly
Claudio Irigoyen, Head of Global Economics, BofA Global Research
Iran: A chokepoints story
The U.S.-Israel military operation in Iran has potentially deep and persistent geopolitical implications. In our baseline scenario, we don't expect a protracted conflict, limiting upside to oil to $10-$15/bbl, but tail risks are much bigger than in 2025. A persistent spike in oil prices exposes the global economy to a risk of a stagflationary shock. A related issue is the U.S. vs China race to influence chokepoints: the U.S. has incentives to increase control of strategic energy supply and advanced chip technology to counteract China's dominance in rare earth minerals. Developments from now until the Trump-Xi meeting in April will be key to watch beyond the very fluid dynamics of the U.S.-Iran conflict.
Limited global inflation shock, with EMEA most exposed
EMEA is the most exposed region to energy price shocks, with an average share in the basket far higher than any other. Emerging Asia is also exposed, but prices are less sensitive. Most developed markets, including the U.S., are generally less sensitive to energy prices, somewhat limiting inflation risks. But the Euro Area's and Japan's exposure to energy is more elevated. Besides oil, shipping prices could spike again in the short term. As with the conflict in the Red Sea, this may most significantly impact Asia-Europe routes.
Buy the dip in equities, USD and rates up, cautious emerging markets
For equities, geopolitical events have historically offered buying opportunities, but low cash balances from investors and attacks on U.S. allies offer caveats. We expect USD strength to extend against a backdrop of higher oil prices and lower equities. For rates, the oil price move likely dominates, creating upside risks over coming weeks. The initial reaction to emerging markets assets could be substantial given initial conditions.
