Earnings improvement is still fairly nascent In 2023, we saw an earnings recession, at least in the first half of the year, despite GDP growth that was ahead of trend. Back then, companies were adapting to higher rates, weaker demand and climbing costs, which weighed on earnings. Ohsung Kwon expects earnings growth to look much better in 2024. This year benefits from a lower 2023 earnings base on which to build as well as a number of positives, including rising margins through more rational costs and improved demand in certain sectors. US Equity Strategy believes that capex growth from large cap tech will be virtuous, boosting other groups from semis to hardware to power grid equipment. The end of destocking indicates the end of the manufacturing recession and could be meaningful for the earnings recovery as consumers shift from services back to the goods side of the economy. And while estimating 2025 earnings is difficult as much can happen between now and then, we see compelling growth next year too, partly on better demand, helped to some degree by Fed cuts.   You may also enjoy listening to the Merrill Perspectives podcast, featuring conversations on the big stories, news and trends affecting your everyday financial life.   "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2024 Bank of America Corporation. All rights reserved.