Global Wave: Macro and earnings converge

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Global Wave: Macro and earnings converge

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Global Wave

Macro and earnings converge

The Global Wave is improving in tandem with earnings 25 June 2026

The signal from the Global Wave remains positive this month with small improvements Quant Strategy

in macro data across most components. The rising Global Wave is now clearly moving in Global

the same direction as the strengthening global earnings cycle. After previous trough

signals in the Global Wave, the MSCI AC World Index returned a median 16.5% in the

subsequent 12 months. By itself, a rising Global Wave is a positive signal for Emerging

Markets, Semiconductors, and the global Risk and Momentum styles.

Six of seven components improved

Six of the seven components of the Global Wave improved this month. The components

contributing positively include Global Industrial Confidence, Global Capacity Utilisation,

Global Unemployment, Global Producer Prices, Global Credit Spreads, and Global

Earnings Revision Ratio. In contrast, Global Consumer Confidence contributed Nigel Tupper >>

negatively, falling across 65% of countries. Quant Strategist Merrill Lynch (Australia)

+61 2 9226 5735

Positive signal for the Boosters nigel.tupper@bofa.com

The performance of cyclical Global Boosters versus the defensive Bunkers has had a Amar Vashi >> Quant Strategist

73% correlation with the Global Wave (since 1998). The Boosters outperformed the Merrill Lynch (Australia)

Bunkers by +7.4% in May and outperformed by +33.8% year-to-date. amar.vashi@bofa.com

Sumuhan Shanmugalingam >>

Chart 1: The Global Wave signal remains positive as six components improved in May QuantMerrill StrategistLynch (Australia)

The Global Wave is an amalgamation of seven components across 50 countries sumuhan.shanmugalingam@bofa.com