Accessible version The Flow Show AI-awe to AI-poor & other Great Rotations Scores on the Doors: YTD gold 13.4%, oil 9.5%, intl stocks 8.7%, commods 8.1%, govt bonds 1.2%, IG 1.2%, HY 1.2%, cash 0.4%, US stocks -0.2%, US$ -1.4%, bitcoin -25.0%. Zeitgeist: "Not even AI's best LLM could unravel the raw emotions of this tape." Tale of the Tape: Trump approval on Wall St at all-time highs, on Main St at new lows (42.1%, on inflation 36.4%); no Trump bump after Feb 24th State of the Union showpiece for affordabil ...

The Flow Show Rock the Geopolitics Scores on the Doors: oil 16.2%, gold 14.6%, commodities 11.8%, international stocks 8.8%, govt bonds 1.4%, IG 1.4%, HY 1.1%, cash 0.5%, US 0.2%, US$ -0.4%, bitcoin - 23.6% YTD. Tale of the Tape: stocks traded AI leaders only in '24/'25, in '26 trading AI leaders and laggards… long "builders" (semis/materials) & short "spenders" (Mag7), long "adopters" (banks) & short "disrupted" (software); once market cap of laggards exceeds market cap of leaders no good for SPX; contrari ...

Global Fund Manager Survey Capex too hot right now BofA February Global Fund Manager Survey Bottom Line: FMS sentiment stays uber-bullish…asset price upside in Q1 harder when all positioned for it; investors most OW commodities since May'22, most OW stocks since Dec'24, most UW bonds since Sep'22; FMS cash 3.4% up from record-low 3.2%. On Macro: "run it hot" so hot right now…most optimism on "boom" since Feb'22, on >10% EPS growth since Aug'21, on growth since Aug'21; but capex too hot right now …CIOs telli ...

Investment Rating - The report indicates a long position on Main Street and a short position on Wall Street until there is a policy pivot to address affordability, as reflected in the performance of Bro Billionaires compared to small caps [1][3]. Core Insights - The report highlights peak positioning, peak liquidity, and peak inequality, suggesting a cautious outlook on high-flying assets like big tech and cryptocurrencies, while favoring small-cap and emerging market investments [1][2][16]. - A significant loss in the crypto market, amounting to $2 trillion, is noted, which represents 10% of US consumer spending, indicating a shift in Wall Street's focus from AI spenders to beneficiaries in manufacturing and services [3][10]. - The report anticipates key price levels for frothy assets to hold, with specific targets for big tech (XLK at $133), bitcoin (at $58,000), and gold (at $4,550 per ounce), contingent on the US dollar not surging [2][15]. Summary by Sections Market Flows - Weekly flows show $87.2 billion to cash, $34.6 billion to stocks, and $23.0 billion to bonds, with notable outflows from gold and crypto [10][46]. - Cumulative inflows for the decade to date are reported as $5.0 trillion to cash, $3.0 trillion to stocks, and $2.4 trillion to bonds, with gold and crypto receiving $128 billion and $98 billion respectively [12][34]. Positioning and Sentiment - The BofA Bull & Bear Indicator rose to 9.6, indicating a contrarian "sell signal" for risk assets, with strong inflows to tech and high-yield bond funds, while cash levels remain low [13][14]. - Positioning metrics suggest that a reversal in the Bull & Bear Indicator sell signal could occur with increased cash levels and significant outflows from stocks [14]. Sector Performance - The report notes inflows into tech ($6.0 billion), energy ($4.0 billion), and materials ($0.7 billion), while outflows were observed in consumer, utilities, healthcare, and real estate sectors [47]. - The report emphasizes a shift towards small and mid-cap stocks as favorable investments in the lead-up to the US midterms, driven by political interventions aimed at reducing costs in energy, healthcare, and housing [16][24].

Investment Rating - The report indicates a bullish sentiment towards gold, oil, and commodities, with gold showing a year-to-date return of 24.2% [1]. Core Insights - The report emphasizes the trend of US dollar debasement as a primary investment theme, suggesting that this will lead to increased liquidity and a focus on assets like gold and commodities [20]. - It highlights the correlation between the US dollar's performance and political factors, particularly the approval ratings of President Trump, which have historically influenced market sentiment [2][22]. - The report notes a significant inflow into gold and materials, indicating a shift in investor preference towards these assets amid economic uncertainty [18][57]. Summary by Sections Market Performance - Year-to-date performance shows gold at 24.2%, oil at 13.9%, and commodities at 12.1%, while US stocks lag at 1.8% [1]. - The US dollar has depreciated by 12% since Trump's inauguration, which is seen as beneficial for manufacturing in key swing states [2]. Investment Strategies - The report suggests a "permanent portfolio" strategy with a 10-year return of 8.7%, the best since 1992, indicating a strong performance across diversified asset classes [3][4]. - It recommends long positions in bonds, international equities, and gold as a hedge against US dollar debasement and inflation [19][24]. Asset Flows - Recent flows indicate $10 billion to cash, $17 billion to bonds, and $6.7 billion to gold, while equities saw a $15.4 billion outflow [11][57]. - Notably, there was a record inflow of $11.8 billion into materials, reflecting a growing interest in this sector [18][50]. Economic Context - The report discusses the implications of a potential economic boom leading up to the midterm elections, with a focus on how this could affect asset prices and investor behavior [20]. - It also highlights the historical performance of gold and emerging market stocks during previous US dollar bear markets, suggesting they are likely to outperform again [44].

Investment Rating - The report indicates a "Sell" signal based on the BofA Bull & Bear Indicator, which is currently at 9.2, down from 9.4 [68][69]. Core Insights - The report highlights a significant outflow from equities, particularly from China ETFs, with a record outflow of $49.2 billion, while Japan and Europe saw inflows [21][45]. - The investment strategy suggests a rotation towards small and mid-cap stocks, driven by a favorable economic environment and government interventions aimed at affordability [22][27]. - Emerging Markets are positioned to enter a new secular bull market, supported by strong commodity prices and a shift in global economic dynamics [20][40]. Summary by Sections Market Performance - Year-to-date performance shows gold at 14.4%, commodities at 5.2%, and international stocks at 4.5%, while US stocks have only gained 1.0% [1]. - The report notes a significant decline in bond prices, with the 30-year US Treasury down 50% and JGB down 45% from peak to trough in the 2020s [3][18]. Economic Indicators - The report discusses the impact of Fed Chair nominations on yields, noting that yields have increased every time following nominations since 1970 [2][34]. - The MOVE index of Treasury volatility is at a four-year low, indicating market confidence that the new Fed Chair will not push 30-year Treasury yields above the 5% level [2]. Investment Flows - Weekly flows indicate $15.4 billion inflow to bonds and $4.9 billion to gold, while equities experienced a $43.2 billion outflow, marking a record driven by China ETFs [13][45]. - BofA private clients have shown a preference for IG bonds, municipal bonds, and TIPS ETFs, while selling REITs and high-yield bonds [15][51]. Sector Analysis - The report identifies financials and materials as sectors with inflows, while technology and consumer sectors faced outflows [47]. - The analysis suggests that small and mid-cap stocks are likely to outperform larger caps due to favorable policy changes and economic conditions [27][40].

Investment Rating - The report indicates a negative sentiment towards Financials, with record outflows observed, suggesting a cautious investment stance in this sector [2][9][17]. Core Insights - Institutional clients have been the largest net sellers of equities, marking the seventh consecutive week of outflows, with a notable $6.4 billion sold in single stocks [9][20]. - Financials experienced the largest outflows in history, with significant selling across eight of eleven sectors, driven by concerns over policy and earnings despite solid fundamentals [9][17]. - In contrast, Consumer Staples saw the largest inflows recorded, indicating a shift in investor preference towards more stable sectors [9][17]. Summary by Relevant Sections Client Flows - Institutional clients sold equities for the seventh straight week, with a cumulative outflow of $6.4 billion, significantly below the average since 2008 [9][20]. - Hedge funds and retail clients were net buyers, contrasting with institutional selling behavior [20][21]. Sector Performance - Financials led the outflows, with a record $5 billion sold, followed by Technology and Industrials, while Consumer Staples and Health Care saw inflows [9][17][23]. - The report highlights that the trailing 52-week buybacks as a percentage of market cap are at their lowest since early 2024, indicating a potential slowdown in corporate buyback activity [9]. ETF Trends - Fixed Income ETFs recorded a historic inflow week, while equity ETFs saw muted inflows, with clients favoring Growth ETFs over Value and Blend [9][19]. - The report notes that clients sold ETFs in six of eleven sectors, with Technology and Communication Services leading the outflows [9][19].

Investment Rating - The report indicates a bullish sentiment among investors, with stock allocation at 8-month highs and cash levels at a low of 3.8% [1][13][15]. Core Insights - Investor sentiment is the most bullish since February 2025, with a notable increase in growth optimism and a significant drop in global recession concerns [2][25]. - The most crowded trade is "long gold" at 43%, while the biggest tail risk identified is the "AI bubble" at 33% [3][30]. - A record 54% of investors believe AI stocks are in a bubble, reflecting a shift in sentiment from previous months [35][36]. Summary by Sections Macro & Policy - Global recession concerns are at their lowest since February 2022, with a 6-month surge in growth optimism [2][25]. - Expectations for a soft landing are at 54%, while 33% expect no landing and only 8% foresee a hard landing [26][27]. Risks & Crowds - The most crowded trade is "long gold" (43%), and the primary systemic credit event risk is identified as "private equity/credit" (57%) [3][5][34]. - 60% of investors believe global stocks are overvalued, marking a record high [46]. Asset Allocation - Investors are most overweight in commodities since March 2023, with a net 14% overweight position [62]. - Emerging market equities have seen a significant increase in allocation, now at a net 46% overweight, the highest since February 2021 [67][70]. Trading Ideas - Contrarian trades suggested include long bonds-short stocks and long UK-short EM [4]. Liquidity & Cash Levels - Liquidity conditions are rated positively by 59% of investors, the highest since September 2021 [40][42]. - The average cash level among investors has dropped to 3.8%, indicating a strong inclination towards equities [15][14]. Expectations for Bond Yields - A net 28% of investors expect higher long-term rates in 2026, the highest since June 2022 [43][44]. AI and Productivity - 52% of investors believe AI is already increasing productivity, with expectations for further increases in the coming years [36][38].

Investment Rating - The report indicates a positive investment outlook for the Asia Pacific ex-Japan region, with 90% of investors expecting equities to rise in the next 12 months [2][17]. Core Insights - The global growth forecast is improving, with APAC ex-Japan economic prospects reaching an 11-month high, and over half of respondents anticipating a stronger Japanese economy in the next year [1][3]. - Investor sentiment towards China is notably optimistic, with a net 8% expecting a stronger economy, a significant shift from previous expectations of weakness [4][26]. - Japan remains a favored market, with 7 in 8 panelists expecting positive returns, driven by corporate governance reforms and policy normalization [3][40]. Summary by Sections Economic Outlook - The global growth forecast is gaining momentum, particularly in the APAC ex-Japan region, which has reached an 11-month high [1]. - China's growth outlook is improving, with a notable increase in investor sentiment, as indicated by the China Risk-Love indicator reaching its highest level since April 2021 [4][26]. Market Sentiment - 90% of investors anticipate a rise in APAC ex-Japan equities over the next year, with return expectations at their highest since February 2023 [2][17]. - Japan is viewed positively, with virtually no investors expecting a weaker economy in the next 12 months [3][38]. Sector Preferences - Semiconductors and banks are highlighted as the most favored sectors in Japan, benefiting from higher interest rates and ongoing technological advancements [47]. - In the broader Asia Pacific ex-Japan region, semiconductors, tech hardware, and financial services are the most preferred sectors, while energy and consumer staples are out of favor [52]. Investment Themes - Key investment themes include AI, anti-involution, and corporate value-up programs in Korea, reflecting a focus on innovation and corporate governance [5][60]. - In China, the focus is on AI and semiconductors, while cyclicals and green economy themes have lost traction [54].

Investment Rating - The report indicates a bullish outlook on various asset classes, with specific emphasis on international stocks and commodities, particularly gold and silver [2][14]. Core Insights - The report highlights a shift towards global rebalancing, with a significant inflow of $1.6 trillion into US equities during the 2020s compared to only $0.4 trillion into global funds, suggesting a potential investment opportunity in international markets [2][24]. - The Tehran stock exchange has seen a remarkable increase of 65% since August, indicating a potential investment opportunity in the Iranian market, despite stable conditions in Saudi and Dubai markets [3][29]. - The report emphasizes the importance of the Japanese yen's weakness against the Chinese renminbi, which poses risks for global liquidity and capital flows, particularly as Asia's current account surpluses are recycled into US and European assets [1][24]. Summary by Sections Market Performance - Year-to-date performance shows bitcoin at 11.3%, oil at 8.0%, and gold at 6.8%, while global stocks are at 3.9% and US stocks at 1.2% [1]. - A total of $71.1 billion has flowed into stocks, with $23.4 billion into bonds and $2.8 billion into gold, indicating strong investor interest in equities and precious metals [9][41]. Investment Strategies - The report suggests maintaining long positions in international stocks, particularly in China, as a catalyst for ending deflation in Japan and Europe, which could drive further market growth [2][14]. - The report also notes that gold is expected to be the best-performing asset of the 2020s, driven by factors such as war, populism, and fiscal excess, with a historical average price gain of approximately 300% during previous gold bull markets [14][39]. Asset Allocation - BofA private clients have a significant allocation of 64.5% in stocks, with a notable increase in private client stock holdings by 13% in 2025, driven by price appreciation rather than share count [11][47]. - The report indicates a shift in investment strategies, with private clients buying municipal bonds, emerging market debt, and REIT ETFs while selling Japanese and low-volatility ETFs [11][47].