Must Read Research: Size of the Market, World Cup & Paper Goods, Energy Contingencies, and LatAm Elections

Hello, and welcome to Must Read Research on B of A Global Research Unlocked. In this podcast, we offer quick summaries from the prior week's most interesting and impactful research. I'm Candace Browning, Head of Global Research at B of A Securities, and we're recording this episode on Monday, June 1st, 2026.

This week, we offer a hitchhiker's guide to the investment universe. We discuss a World Cup that's fueling global beverage demand, contingency plans amid shifting energy markets, and the outlook ahead for elections in Latin American countries. Let's start with the big picture, where market scale, concentration, and earnings power continue to reinforce one another.

The value of stocks and bonds has more than tripled from the low of $99 trillion during the global financial crisis in 2008, but size now matters less than the feedback cycle between wealth, earnings, and concentration, according to Chief Investment Strategist Michael Hartnett. U.S. households hold a record approximately $68 trillion in equities, which is nearly double the $35 trillion held in 2019, reinforcing the boom loop and the K-shaped economy. The world's top 10 companies now include all seven of the leading mega-cap technology names alongside major semiconductor and energy players.

That's a stark shift from prior decades' mix of oil, telecom, and industrial leaders, with just one company remaining in the global top 10 throughout the 21st century. And concentration is extreme. The big AI 10 make up approximately 40% of the S&P 500 and could rise meaningfully with future IPOs on the horizon and EPS growth supporting the AI story.

From markets and concentration, let's turn to the global consumer, starting with how a major sporting event is shaping demand. World Cup, hosted throughout North America, could deliver one of the largest beverage demand uplifts seen in the tournament's history. The U.S. and Mexico are among the largest global beer markets and account for approximately 34.1 million tons of beer consumption.

Consumption intensity is also elevated in high win probability contenders like Germany and Spain, creating a favorable overlap between consumption capacity and winning chances. Marketing and paper analyst George Staphos believes that base volumes could rise by 1% and over 2% is within reach. But gains are unlikely to be evenly distributed.

Incremental demand historically depends on teams making deep tournament runs, making the fate of Brazil, Germany, Spain, England, and the tournament hosts important. Similarly, France's lower per capita consumption dampens packaging upside in case they make a run. Timing is also ideal.

America's 250th birthday celebrations land mid-tournament, extending the summer consumption backdrop. Large sporting events also promote premiumization and shifting demand toward cans, which benefits packagers. From consumer demand, let's shift to energy, where investors are weighing near-term catalysts against longer-term supply dynamics.

Investors have been hesitant to add to energy positions because if the strait reopens, shares could meaningfully decline. Integrated refining and midstream analyst Jean-Anne Salisbury examines the five fall starts for clues as to what may happen with the stocks the day the strait finally reopens. U.S.

LNG refiners and integrators each fell an average of 4-5% on days when markets became optimistic about ship traffic resuming. But despite outages in the Gulf, new crude supply is actually still coming online. The UAE has left OPEC, Canadian pipelines are expanding, and the Permian is growing.

That all should keep a lid on longer-term oil prices. With the stocks pricing in a long-term crack of $16, we see an opportunity if the stocks fall in line with prior false reopenings. Without an upward bias to long-term oil, we'd want to see oil shocks discount $65 long-term Brent before getting more enthusiastic.

Now from energy markets, let's turn to macro and politics, where upcoming elections could reshape the outlook in Latin America. For LATAM, the 2026 election cycle is shaping up as the next big macro catalyst. The region's last six elections have gone to the right or center-right, and Costa Rica has already delivered the most market-friendly signal, with the ruling party winning 31 of 57 seats, a level of congressional control not seen in 40 years.

The bigger story, though, is Brazil, where debt has already climbed to 80.1% of GDP and is projected to reach 80.9% by the end of 2026. Stabilization requires approximately a 2.8% GDP primary surplus, far above what the current administration has delivered. The possibility of a more orthodox policy path could create room for improved sentiment and materially lower rates.

That is why Brazil remains the anchor election. Colombia and Peru will determine whether the regional story broadens into a more durable repricing around fiscal adjustment and private investment-led recovery, or remains stuck with interventionism, weak confidence, and higher macro risk. So from market concentration and earnings power, to global consumer demand, to energy supply dynamics and the evolving political landscape in Latin America, those are the themes shaping the conversation this week.

Thanks for listening, and we'll be back next week. Bank of America and B of A Securities are the marketing names for the global banking businesses and global markets businesses, which includes B of A 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.

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