Investment Rating - The report indicates a positive investment sentiment with the Global Equity Risk-Love positioned at the 76th percentile of its historical range since 1987, suggesting a favorable outlook for equities [1][17][23]. Core Insights - The Global Risk-Love indicator reflects a risk-loving sentiment among investors, with emerging markets showing potential for positive returns as they approach euphoric levels [4][5]. - Historical data suggests that when the Global Risk-Love transitions from depressed levels to euphoric levels, equities tend to perform well over the subsequent 12 months, barring a downturn in the global economic cycle [4][5]. - The report highlights a notable dispersion in risk sentiment across different regions, with some emerging markets like South Africa and Brazil showing strong bullish signals, while others like Indonesia and Thailand exhibit panic [2][14]. Summary by Category Global Risk-Love - The Global Risk-Love indicator is currently at 76, indicating a shift towards optimism but not yet euphoric [14]. - Historical performance shows that in 13 episodes since 1987, emerging markets equities have returned an average of 24% over the next 12 months after hitting euphoric levels, with only three instances of losses coinciding with global PMI downturns [5][9]. Regional Insights - Korea's Risk-Love has improved to the 27th percentile from panic levels earlier in the year, with historical data indicating median returns of 17% over the next six months following similar recoveries [3][13]. - Emerging Markets Risk-Love is at the 44th percentile, while Asia ex-Japan is at 40th percentile, both indicating a neutral stance [28][31]. - The Philippines and South Africa are in euphoric zones at the 93rd and 98th percentiles respectively, suggesting strong bullish sentiment [48][52]. Specific Market Indicators - The report notes that 85% of central banks are currently in easing mode, which is expected to support the growth cycle [10]. - The Risk-Love indicators for various countries show significant variations, with South Africa and Poland at 98 and 93 respectively, while Indonesia remains low at 5 [14][41].

Investment Rating - The report maintains an "Overweight" position on "BIG" (Bonds, International, Gold) and suggests cyclical buying of Treasuries [19] Core Insights - The S&P 500 is on the verge of its 7th major breakout since 1990, with only 22 stocks at all-time highs, indicating a narrow market participation [3][21] - The BofA Bull & Bear Indicator has risen to 5.8, reflecting a neutral sentiment but indicating potential for profit-taking as inflows to equities and high-yield bonds approach 1.0% of AUM [13][56] - The report highlights significant inflows across various asset classes, with $427 billion to cash, $325 billion to stocks, and record inflows of $40 billion to gold in H1 2025 [12][34] Summary by Sections Market Performance - Year-to-date performance shows gold at 26.2%, stocks at 8.4%, and commodities at 0.4%, while oil and crypto have declined by 7.8% and 14.1% respectively [1][2] Economic Indicators - The report notes that the US dollar has decreased by 10.4% year-to-date, while the 12-month forward EPS expectations are 11% in the US, 8% in China, and 6% in Europe [18] Investment Flows - Weekly flows indicate $26.1 billion to cash, $12.1 billion to bonds, and $3.5 billion to equities, with a notable outflow of $4.4 billion from US small-cap stocks [11][16] Policy Outlook - The report anticipates potential Fed rate cuts and a shift in fiscal policy under Trump, which could support equity markets and lead to a US dollar bear market [19][20] Sector Analysis - The report suggests long positions in airlines and small-cap value stocks while shorting defense and momentum stocks, reflecting a tactical approach to sector allocation [17][20]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - The global economy is expected to grow by 3% in 2025 and 2026, accelerating to 3.3% in 2027, with global inflation hovering around 2.5% [9][11] - AI is projected to drive approximately $1 trillion in spending by 2030, with over $800 billion dedicated to generative AI infrastructure [2][66] - The adoption of Agentic AI is on the rise, with an estimated spending of $155 billion by 2030, indicating a significant potential for productivity improvements [3][59] Global Economic Outlook - The global growth forecast has been upgraded by 20 basis points, largely due to China benefiting from a trade truce [9][10] - Trade policy uncertainty remains high, with geopolitical risks potentially affecting oil prices and energy importers [11][13] - The US economy is projected to grow by 1.6% in 2025-2026, reaching 1.9% in 2027, with a stable labor market [12][14] AI and Data Center Market - The global data center market is expected to reach ~$1 trillion by 2030, with AI servers representing 80-85% of the total addressable market (TAM) at ~$700 billion [2][66] - AI networking and storage are projected to account for ~$74 billion and ~$39 billion, respectively [2][66] Agentic AI Adoption - Agentic AI systems are designed to operate autonomously, with customer service, marketing, sales, and software development being the first major job functions to adopt these technologies [3][61] - Surveys indicate that 64% of organizations plan to pursue agentic AI initiatives by 2025, with significant spending potential [3][59] Precision Medicine and AI - AI is expected to accelerate the development of personalized medicine, which tailors treatments to individual patient profiles, although scalability and cost remain challenges [4][46] - Companies like Tempus AI, Guardant Health, Exact Sciences, and NeoGenomics are leading in AI precision medicine [46][48] Payments and Cross-Border Travel - A survey indicated that over 40% of respondents intend to change their cross-border travel plans, which could impact companies like Visa and Mastercard [52][53] - The travel industry is facing headwinds due to concerns about government policies and economic conditions [53][56] Semiconductor Industry - The semiconductor market is experiencing competitive dynamics among key players like Nvidia, Broadcom, and AMD, particularly in AI-related technologies [66][67] - AI data center systems are expected to grow significantly, capturing a larger share of global IT spending by 2030 [66][67]

Investment Rating - The report maintains a "BUY" rating for Xiaomi Corporation with a price objective of HKD 66.00, while the current price is HKD 56.90 [1][7]. Core Insights - Xiaomi's recent product launch event showcased the YU7 electric vehicle (EV) with pricing that aligns with market expectations, and initial orders exceeded 289,000 units, significantly outperforming the SU7's first-day orders of around 89,000 units [1]. - The company is focusing on enhancing its autonomous driving capabilities and expanding its IoT ecosystem, with significant investments in autonomous driving development [2]. - Xiaomi's strategy emphasizes price performance in its smartphone and IoT offerings, maintaining competitive pricing while improving specifications [3]. Financial Estimates - The report provides financial projections for Xiaomi, estimating net income growth from CNY 19.273 billion in 2023 to CNY 56.845 billion by 2027, with a corresponding EPS increase from 0.69 to 2.19 [4][9]. - Sales are projected to grow from CNY 270.970 billion in 2023 to CNY 672.111 billion by 2027, indicating a robust growth trajectory [9]. - The report highlights a significant improvement in free cash flow per share, expected to rise from 1.41 in 2023 to 2.37 by 2027 [4]. Market Position and Product Launches - Xiaomi's YU7 EV is positioned competitively against peers like Tesla Model Y, with better price-performance metrics [1][15]. - The company has launched new smartphone models and other IoT products, reinforcing its commitment to innovation and market competitiveness [3]. - The report notes that Xiaomi's EV shipments are expected to reach 350,000 units by 2025, with the YU7 accounting for 24% of this volume [17][19].

Investment Rating - The report indicates a neutral investment rating with the BofA Bull & Bear Indicator at 5.5, reflecting a balanced sentiment in the market [60][62]. Core Insights - The report highlights significant inflows into various asset classes, with $45.4 billion into stocks, $18.6 billion into bonds, and $2.8 billion into gold, indicating a strong preference for equities and fixed income [12][14]. - The report notes a record annualized inflow of $80 billion into gold funds YTD, suggesting a growing interest in precious metals as a safe haven [16][31]. - Emerging market (EM) debt has seen the second-largest inflow on record at $4.8 billion, indicating renewed investor confidence in this sector [16][29]. - The report discusses the geopolitical landscape, particularly the implications of US military actions in Iran and the potential impact on Treasury yields and investor sentiment [17][20]. Summary by Sections Market Flows - Total inflows to equities reached $321.9 billion YTD, with a notable $37 billion inflow into US equities, marking the third-largest annual inflow ever [14][28]. - The report details that 63.2% of BofA private client assets are allocated to stocks, with 18.8% in bonds and 11.0% in cash [14][49]. Geopolitical Insights - The report emphasizes the theme of de-dollarization, with clients expressing interest in diversifying away from the US dollar, although this process is expected to be gradual [20]. - It also discusses the potential for a US-China trade deal to positively impact Chinese stocks, reflecting a cautious optimism in the market [18][20]. Economic Indicators - The BofA Global EPS Growth Model indicates a 3% growth in earnings per share, suggesting a positive outlook for corporate profitability [59]. - The report notes that 71% of MSCI ACWI country stock indices are trading above their 50- and 200-day moving averages, indicating a bullish market breadth [15].

Investment Ratings - The report maintains a Buy rating on Aspeed, MPI, and a Neutral rating on WT Micro [2][3][4]. Core Insights - The semiconductor industry is experiencing significant growth driven by the rise of AI ASICs, which is positively impacting companies like Aspeed, MPI, and WT Micro [1][2][3]. - Price objectives (PO) for Aspeed, MPI, and WT Micro have been raised due to improved earnings outlooks and market dynamics [1][8][10]. Summary by Company Aspeed - Aspeed is expected to benefit from a favorable capex efficiency due to the rise of ASIC-based AI servers, leading to a long-term optimistic outlook [2]. - The company’s 2025/26/27E EPS estimates have been raised by 6%/7%/15% respectively, with a new price objective of NT$5,300 [2][12]. MPI - MPI's growth is anticipated to be driven by AI ASICs, with an expected increase in pin count and robust growth momentum [3]. - The 2025/26/27E EPS estimates have been increased by 5%/16%/12%, and the price objective has been lifted to NT$1,000 [3][16]. WT Micro - WT Micro is expected to see improved growth post-transition to TPU, with a more positive outlook for 2H25 [4]. - The 2025/26/27E EPS estimates have been raised by 5%/9%/10%, with a new price objective of NT$135 [4][21].

Investment Rating - The report indicates a general improvement in investor sentiment towards the Asia Pacific region, with a net 21% of participants expecting a stronger Japan economy and a net 10% anticipating a weaker Chinese economy, marking significant improvements from previous months [4][25]. Core Insights - The report highlights a recovery in growth expectations, with a notable shift in investor sentiment from panic to optimism, driven by confidence in trade resolutions and global monetary easing [1]. - Earnings recovery is anticipated, with nearly 90% of participants expecting higher earnings levels in the coming year, a significant turnaround from previous expectations of a slowdown [2]. - The semiconductor sector is viewed positively, with a net 38% of investors expecting it to strengthen over the next 12 months, indicating a favorable outlook for technology investments [6][61]. Summary by Sections Economic Outlook - A net 46% of investors expect a weaker global economy, down from 82% in April, while a net 45% foresee a weaker Asian economy, improving from 89% [1]. - In China, the economic outlook has improved, with only a net 10% expecting a weaker economy, a significant drop from 48% the previous month [3][25]. Country Allocation - Japan has regained its position as the most favored market, followed by India, with South Korea rising to the third spot due to expectations of policy reforms [5][49]. - Thailand and Indonesia remain the least preferred markets among investors [5]. Sector Preferences - In the Asia ex-Japan portfolio, technology sectors are favored, while energy, materials, and real estate are avoided [6][51]. - In Japan, banks are the top choice, benefiting from higher interest rates, followed by semiconductors [7][46]. Investment Themes - AI is the most favored investment theme in China, while in India, IT services, infrastructure, and consumption are the primary themes being monitored [54][56]. - The report notes a positive sentiment towards the semiconductor cycle, with expectations for growth in exports from Korea and Taiwan [61].

Investment Rating - The report indicates a neutral investment sentiment with a Bull & Bear Indicator reading of 5.4, suggesting a balanced outlook for global equities [12][75]. Core Insights - Investor sentiment has recovered to pre-Liberation Day levels as fears of trade wars and recessions diminish, with cash levels decreasing to 4.2% from 4.8% in April [1][17]. - Expectations for global growth have improved, with a significant reversal in recession odds, dropping from 42% likelihood in April to 36% in June [2][18]. - The best-performing asset expected over the next five years is international stocks, with 54% of investors favoring them, followed by US stocks at 23% [3][50]. Summary by Sections Macro & Micro - Global growth expectations remain weak, with a net of 46% of investors expecting a weaker economy, although this is an improvement from a record 82% in April [2][22]. - The sentiment for a "soft landing" has risen to 66%, the highest since October 2024, while "hard landing" expectations have decreased to 13% [23][24]. Returns, Risks, Crowds - The most crowded trades include long gold (41%) and long Magnificent 7 (23%), with trade war recession still seen as the primary tail risk at 47% [3][54]. - A net 21% of investors expect higher long-term bond yields, the highest since August 2022 [49]. Asset Allocation - There has been a rotation towards emerging markets, energy, banks, and industrials, while reducing exposure to staples, utilities, and healthcare [4][60]. - The average cash level among investors has decreased to 4.2%, indicating a shift towards equities [17][75]. Corporate Sentiment - Investors view corporate balance sheets as the healthiest since December 2015, with a net 3% stating companies are "underleveraged" [43]. - There is a strong desire for companies to return cash to shareholders, with 32% of investors advocating for this strategy, the highest since July 2013 [46]. Sector and Regional Allocation - FMS investors are net 36% underweight US equities, while being net 34% overweight Eurozone equities [139][140]. - The allocation to banks has increased significantly, with a net 25% overweight position, reflecting a positive sentiment towards the financial sector [156].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights a shift in market dynamics, indicating that risky stocks have traded at a premium to safe stocks for over two decades until recently, and that higher volatility is expected to persist according to the yield curve [8][16] - It suggests that cyclicals are becoming the new defensives, with sectors like Financials, Tech, and Energy showing more earnings stability than the S&P 500 [8][16] - The report emphasizes the importance of macro timing over stock selection, noting that fundamentals can be overshadowed by sentiment and positioning, especially at inflection points [5][8] Summary by Sections Section I: Core Concepts and Methodology - The report discusses the evolution of quantitative strategies, noting that clients now use three times the number of factors compared to 25 years ago, indicating a significant shift towards data-driven investment approaches [19][20] - It also mentions the rise of short-termism, with zero-day-to-expiry options accounting for 50-60% of total SPX option volume, reflecting a growing focus on short-term trading strategies [27][28] Section II: Stock Strategies within the S&P 500 - The report outlines various stock strategies, emphasizing that different factors may be more rewarded in specific sectors, which can enhance the stock screening process [17][18] - It highlights the performance of stock screen techniques across valuation, growth, quality, and risk factors, noting that some factors have long-term efficacy while others depend on macro cycles [17][18] Section III: Stock Strategies within Industries - The report provides a sector-specific overview, indicating that certain sectors like Communication Services and Consumer Discretionary have distinct performance characteristics that can be leveraged for investment strategies [12][13] Section IV: Stock Strategies for Growth and Value Managers - The report discusses the importance of distinguishing between growth and value strategies, noting that the performance of these strategies can vary significantly based on market conditions [14][15] Section V: BofA Quality Strategies - The report emphasizes that quality stocks are finally garnering a premium, with a focus on what drives quality and how it can be measured within different sectors [14][15] Section VI: Relative Valuation for Industries - The report includes a relative valuation analysis for various industries, providing insights into how different sectors are valued compared to one another [14][15] Section VII: Relative Valuation between Growth and Value Benchmarks - The report discusses fundamental valuation characteristics, highlighting the differences between growth and value benchmarks and their implications for investment strategies [14][15] Section VIII: ADR Strategies - The report outlines strategies for American Depositary Receipts (ADRs), indicating how these can be integrated into broader investment strategies [14][15]

Investment Rating - The report indicates a bullish sentiment towards long bonds and emerging markets, while expressing caution regarding US equities and the US dollar [1][2][72]. Core Insights - The report highlights a significant shift in investment flows, with $15.0 billion moving into bonds and $1.7 billion into gold, while US equities experienced a $10.0 billion outflow [8][11]. - Emerging markets are positioned favorably, with relative price performance at 50-year lows compared to US equities, suggesting an easy allocation decision towards EM [2][3]. - The BofA Bull & Bear Indicator rose to 5.2, indicating strong inflows into high-yield bonds and emerging market assets, reflecting robust credit market conditions [5][11]. Summary by Sections Market Performance - Year-to-date performance shows gold at 25.8%, stocks at 7.7%, and government bonds at 6.0%, while oil and crypto are down by 5.0% and 5.4% respectively [1]. - The report notes that international value stocks are outperforming growth stocks, particularly in the context of stalled European and Japanese banks [1][14]. Investment Flows - Weekly flows indicate a $15.0 billion inflow to bonds, with significant inflows into investment-grade and high-yield bonds, and emerging market debt seeing its fourth-largest inflow ever at $3.8 billion [13][76]. - Private clients are increasingly favoring high-yield bonds, TIPS, and utility stocks, while selling off Japan, dividend, and energy stocks [11][83]. Economic Outlook - The report discusses a potential shift in focus from global rate cuts to Fed cuts in the second half of the year, driven by a weakening US labor market and deflationary pressures from tariffs [1][32]. - It emphasizes that the US government budget deficit has averaged 9% of GDP over the past five years, driven by a significant increase in government spending [31][32]. Sector Analysis - Inflows were noted in materials, consumer sectors, and real estate, while financials, technology, and healthcare sectors experienced outflows [77]. - The report suggests that the current environment is conducive for a contrarian long bond strategy, despite the prevailing bearish sentiment towards US dollar assets [63][72].