Investment Rating - The report maintains a very bullish investment rating with a BofA Bull & Bear Indicator at 9.0, indicating a favorable outlook for equities despite recent outflows from tech stocks and emerging market debt [13][36]. Core Insights - The report emphasizes a strategy of "long boom, short bubble," suggesting that investors should focus on value cyclicals while reducing exposure to high-risk assets [18]. - It highlights the significant inflows into cash and bonds, with $148.5 billion flowing into cash and $11.1 billion into bonds, indicating a cautious market sentiment [10][16]. - The report notes that geopolitical tensions are driving investors to seek hedges, particularly in energy and materials, with Venezuela and the Arctic being key areas of interest due to their substantial oil reserves [2][18]. Summary by Sections Market Performance - Year-to-date performance shows Bitcoin at 4.1%, gold at 2.9%, global stocks at 2.9%, and US stocks at 1.5%, while oil has declined by 1.7% [1]. - The report indicates that historically, oil has been the best-performing asset three months following a war, with returns of 8.3% [3]. Investment Flows - Recent flows indicate $2.2 billion into stocks, $1.1 billion into gold, and $1.1 billion into crypto, while there were significant outflows from US stocks ($19.0 billion) and emerging market debt ($6.0 billion) [10][16]. - The report notes that private clients have shifted their allocations, with a focus on high dividend stocks, munis, and REITs, while selling bank loans and tech stocks [12]. Asset Allocation Strategy - The recommended strategy for 2026 includes long positions in bonds, international stocks, and gold, while shorting investment-grade bonds and the US dollar [19]. - The report suggests that the optimal time to go long is when market sentiment is bearish, and the Fed is easing, which aligns with current market conditions [17]. Geopolitical Context - The report discusses the geopolitical landscape, noting that the US's shift from exceptionalism to expansionism could favor a contrarian long position on the US dollar [2]. - It highlights the potential for safe-haven demand to spread to the US dollar due to geopolitical tensions, particularly in relation to oil prices [18].

Accessible version The Flow Show Quiz Show Chart 2: Ferrari crashing vs General Motors Ferrari vs General Motors (price relative) Source: BofA Global Investment Strategy, Bloomberg BofA GLOBAL RESEARCH Dec'25 0 2 4 6 8 10 12 14 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 Ferrari vs General Motors (USD price relative) Scores on the Doors: gold 62.1%, stocks 20.3%, IG bonds 10.0%, HY 9.9%, govt bonds 6.0%, commodities 5.9%, cash 4.0%, bitcoin -2.7%, US dollar -9.4%, oil -19.5% YTD. BofA Bull & Bear Indicator: ...

Investment Rating - The report suggests a bullish outlook on commodities, particularly recommending long positions in commodities and oil/energy as the best trades for 2026 [3][4]. Core Insights - The report highlights a significant shift in market dynamics, indicating that commodities are outperforming bonds in the current inflationary growth environment, contrasting with the previous era of secular stagnation [2][3]. - It notes that LatAm stocks have increased by 56% year-to-date, indicating strong performance in the region [3]. - The report emphasizes the importance of monitoring bond market reactions to the "run-it-hot" trade, as they pose a potential threat to stock and credit market upside in 2026 [4]. Summary by Sections Market Performance - Year-to-date performance shows gold at 59.1%, stocks at 19.6%, and commodities at 6.7%, while oil has declined by 16.8% [2]. - The report indicates that the biggest inflows have been into cash ($112.3 billion) and bonds ($15.4 billion), with a notable outflow from tech stocks [13][17]. Investment Strategies - The report advocates for long positions in commodities and oil/energy, viewing them as contrarian trades that are likely to yield positive returns in 2026 [3]. - It suggests tactical long positions in zero coupon bonds in anticipation of Fed cuts, while also recommending mid-cap stocks as a favorable investment due to their relative undervaluation [16]. Economic Indicators - The BofA Bull & Bear Indicator has decreased to 6.0, indicating a neutral sentiment in the market [60]. - The report notes that the current economic environment is characterized by rising bond yields in Japan and China, which are seen as secular floors for global yields [18]. Sector Analysis - Inflows into high-yield bonds ($2.3 billion) and emerging market debt ($2.4 billion) are highlighted, indicating a positive sentiment towards these sectors [17]. - The report also mentions significant outflows from tech stocks, suggesting a shift in investor preference towards more stable sectors [17][40].

Accessible version BofA Securities Equity Client Flow Trends Flows out of Tech at multi-year records Biggest equity ETF inflows in over 3 years; Value>Growth Exhibit 3: Rolling 4-wk avg. Tech flows as a % of Tech mkt. cap now the most (-) since mid-'21 Rolling four-week average net buying (selling) of Tech stocks by our clients ($mn) Hedge funds/institutional clients bought last week's dip More big Tech outflows (at multi-year extremes) Source: BofA Securities -0.05% -0.04% -0.03% -0.02% -0.01% 0.00% 0.01% ...

Investment Rating - The report maintains a "Buy" rating for HA Sustainable Infrastructure (HASI) and a "Neutral" rating for Oklo, while NuScale Power is rated as "Underperform" [41][21][26]. Core Insights - The tone of the Cleantech Symposium improved due to reduced policy uncertainty and increased corporate interest in capitalizing on power growth themes [1]. - Data centers are projected to account for approximately 50% of the expected growth in U.S. power demand, with a forecast of 80-90 GW of incremental data center capacity by 2030 and a 20-25% rise in U.S. electricity demand by 2035 [2]. - Advanced nuclear technologies, particularly small modular reactors (SMRs), are moving towards commercialization, with various companies targeting competitive costs and regulatory approvals [3][13]. - Utility-scale solar is expected to ramp up to 53.5 GW by 2027, although uncertainty in deployment is anticipated from 2028 to 2030 [4][12]. - The need for energy storage solutions is becoming critical, especially in light of supply chain constraints and the shift towards domestic manufacturing [5][11]. Summary by Sections Symposium Panel Takeaways - The Cleantech Symposium highlighted the accelerating U.S. power demand driven by AI/data-center loads and industrial electrification, with solar and storage dominating long-term additions [10][11]. - Interconnection challenges and FEOC compliance are significant factors affecting project bankability and capacity additions [11][12]. Advanced Nuclear - Companies like Oklo and Terra Innovatum are making strides in regulatory engagement and fuel flexibility, with Oklo's first reactor construction underway [21][22][13]. - NuScale's path to commercialization remains uncertain, hinging on key agreements and regulatory approvals [24][26]. Solar and Storage - The residential solar market is expected to see a reset in demand as the 25D ITC expires, but financing innovations may provide pathways for growth [15][17]. - T1 Energy is ramping up domestic module production, with a focus on reducing reliance on Chinese supply chains and increasing domestic content [19][45]. Grid and Energy Efficiency - HASI is expanding its investment pipeline, with a significant project in the SunZia Wind South onshore wind project, indicating strong growth potential in renewable energy investments [37][39]. - The report emphasizes the importance of domestic supply chains and the need for compliance with FEOC regulations to ensure project viability [19][20].

Investment Rating - The report indicates a bullish sentiment among investors, with a net 34% overweight in global stocks, the highest since February 2025 [3][132]. Core Insights - Investors are optimistic about a soft landing for the economy, with 53% expecting this outcome, while global growth expectations have turned positive for the first time since December 2024 [2][19][23]. - The most crowded trade is "long Magnificent 7," with 54% of investors participating, while the AI bubble is seen as the biggest tail risk by 45% of respondents [3][28][31]. - The report highlights a significant shift in asset allocation, with increased exposure to emerging markets, healthcare, and commodities, while UK stocks and consumer discretionary sectors saw the largest declines in allocation [4][51][56]. Summary by Sections Macro Insights - 53% of investors expect a soft landing, 37% foresee no landing, and only 6% predict a hard landing [17][19]. - Global growth expectations have turned positive, with a net 3% of investors anticipating stronger economic conditions [23][105]. Asset Allocation - The report shows a net 17% overweight in commodities, the highest allocation since September 2022 [51][143]. - There has been a record decline in allocation to consumer discretionary stocks, now at a net 23% underweight [56]. Investor Sentiment - The average cash level among investors dropped to 3.7%, indicating a "sell signal" as historically low cash levels have preceded declines in stock prices [14][16]. - The Bull & Bear Indicator remains neutral at 6.3, suggesting a cautious approach among investors [99]. Future Expectations - 37% of investors expect MSCI Emerging Markets to outperform in 2026, while 30% anticipate the Japanese yen to be the best-performing currency [68][71]. - The most bullish catalyst for 2026 is widespread AI productivity gains, as indicated by 43% of respondents [72][75].

Accessible version Asia Fund Manager Survey Recovery in motion When do you think the BOJ next rate hike will be? 29% 68% 4% Dec 2025 Jan-Mar 2026 Apr-Jun 2026 Source: BofA Asia Fund Manager Survey BofA GLOBAL RESEARCH Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. Growth upswi ...

Investment Rating - The report indicates a bullish sentiment with a BofA Bull & Bear Indicator reading of 6.3, suggesting a neutral market outlook [67][68]. Core Insights - The report highlights a record year of inflows into equity ETFs amounting to $1.3 trillion, alongside significant inflows into investment-grade bonds ($430 billion) and technology sectors ($72 billion) [11][24]. - The financial conditions are described as peaking, which correlates with trough credit spreads, indicating a potential risk in financing for AI capital expenditures [3][15]. - The report anticipates a macroeconomic environment characterized by lower rates and higher profits, with expectations of a PMI acceleration benefiting commodities and small-cap stocks [18][15]. Summary by Sections Market Flows - Weekly inflows included $18.7 billion to bonds and $18.3 billion to stocks, with notable inflows into gold ($2.9 billion) and a small amount into cryptocurrencies [11][45]. - The report notes that private clients have allocated $4.2 trillion in assets under management, with 64.6% in stocks and 18.0% in bonds, reflecting a strong preference for growth and staples ETFs [13][51]. Financial Conditions - The report discusses the disparity in borrowing costs, with the US government borrowing at 4% and mortgages exceeding 6%, indicating a challenging environment for consumers and small businesses [2][20]. - It emphasizes that the easing of financial conditions has been significant, with 167 rate cuts in the past year, although a slowdown in rate cut momentum is expected [15][28]. Sector Performance - The report identifies that US equities have seen an inflow of $134 billion, marking the second-largest inflow year ever, while small-cap stocks have underperformed significantly [16][26]. - Inflows into healthcare reached their highest since January 2021, while energy sectors also experienced notable inflows [16][47]. Economic Indicators - The report predicts that the PMI is likely to head toward 55, driven by tax cuts and industrial policy aimed at reshoring, which could benefit international markets [18][15]. - A contrarian trade is suggested, anticipating a CPI drop to 2%, which would favor long-duration Treasuries and sectors focused on affordability [19][15].

Investment Rating - The report indicates a bearish sentiment towards the equity market, particularly highlighting record outflows from single stocks and significant selling by institutional clients [10][20]. Core Insights - Institutional clients were the largest net sellers of US equities, with record outflows of $10.9 billion from single stocks, marking the largest since November 2022 [10][20]. - The report notes that while institutional clients sold off large and mid-cap stocks, they continued to buy small-cap stocks for the second consecutive week [10]. - There were significant outflows from the Technology and Financials sectors, with Technology experiencing the largest outflows as a percentage of its market cap since July 2023 [10][20]. - Despite the outflows in single stocks, there were inflows into equity ETFs, totaling $0.9 billion, indicating a shift in investment strategy among clients [10][20]. Summary by Sections Client Flows - Institutional clients led the selling, with their outflows being the second largest ever recorded, while hedge funds and private clients were net buyers [10][20]. - Cumulative flows by client type show that hedge funds and institutional clients have been net sellers, contrasting with private clients who have been net buyers [8][10]. Sector Performance - The Technology sector saw historic outflows, with a record percentage drop in market cap, while Financials also faced significant selling pressure [10][20]. - Communication Services and Consumer Staples were the only sectors to see inflows, with Consumer Staples experiencing a four-week buying streak [10][20]. Size Segments - Large-cap stocks were the primary focus of selling, with small and micro-cap stocks being the only size segment to see inflows last week [10][25]. - The report highlights a broad-based trend of outflows from large and mid-cap stocks, while small-cap stocks attracted investment [10][25]. ETF Trends - Clients have shown a preference for equity ETFs, with inflows across various styles and sectors, particularly favoring Value over Growth for the seventh consecutive week [10][20]. - The report indicates that clients bought ETFs in nine out of eleven sectors, despite the extreme outflows from single stocks in the Technology sector [10][20].

Investment Rating - The report indicates a neutral investment rating with the BofA Bull & Bear Indicator at 6.3, reflecting a balanced sentiment in the market [58][60]. Core Insights - The report highlights significant investment flows, with $36.5 billion directed to cash, $17.2 billion to stocks, and $17.0 billion to bonds, indicating a strong preference for equities and fixed income [13][37]. - The report notes that gold has experienced a record outflow of $7.5 billion following a substantial inflow of $59 billion over the past four months, suggesting a shift in investor sentiment [18][34]. - The analysis points to a potential economic re-acceleration without inflation, with sectors like housing, real estate, and retail expected to perform well in the upcoming rate-cutting cycle [17]. Summary by Sections Market Performance - Year-to-date performance shows gold up 50%, international stocks up 30%, and US stocks up 20%, while oil is down 16% [1]. - The report identifies the biggest bear risks for 2025 as a disorderly rise in bond yields, a global trade war, and Federal Reserve rate hikes [5]. Investment Flows - BofA private clients have allocated 65.6% to stocks, the highest since October 2021, while bond allocations have decreased to 17.5%, the lowest since March 2022 [14]. - Inflows to equity ETFs have totaled $17.3 billion year-to-date, with $11.4 billion inflows to debt ETFs, indicating a strong interest in both equity and fixed income markets [14]. Economic Indicators - The report notes that US 1-year inflation expectations are currently at 3.4%, suggesting a moderate inflation outlook [30]. - The report indicates that Treasury yields are expected to head lower, with long-duration tech sectors performing well [16]. Risk and Sentiment - Investor sentiment remains long on risk assets, with confidence in the Federal Reserve's support and a belief in limited downside risk [17]. - The report emphasizes that AI is becoming a dominant force in the market, influencing both stock and bond markets [1].