美银：The Flow Show-The Bourse Whisperer

Investment Rating - The report indicates a bullish outlook for gold and international equities, while suggesting caution for US equities and bonds [2][16][21]. Core Insights - The US dollar is expected to enter a bear market, which is likely to benefit gold and emerging market (EM) equities [2][21]. - Defensive sectors such as healthcare, utilities, and staples are currently at their lowest representation in the S&P 500 since 2000, indicating a potential shift in market dynamics [3][11]. - The "Magnificent 7" stocks are trading at a trailing P/E of 42x, which is below the historical average for equity bubbles, suggesting potential for further upside [17][36]. Summary by Sections Market Performance - Year-to-date performance shows gold at 25.4%, stocks at 5.6%, and commodities at -3.2%, with crypto down 7.5% [1]. - Significant inflows have been observed in bonds ($19.3 billion) and gold ($1.8 billion), while equities experienced a notable outflow of $9.5 billion [12][46]. Sector Analysis - The report highlights a barbell strategy for investment, recommending long positions in the "Magnificent 7" and international value stocks to hedge against potential market corrections [3][15]. - Private clients are increasingly favoring defensive sectors, with a notable shift towards utilities and staples [15][51]. Foreign Investment Trends - Foreign investors have purchased approximately $350 billion in US equities and $200 billion in US bonds since 2020, with 2025 projected to see strong inflows into US stocks [14][28]. - Inflows into EM equities have been robust, with the biggest inflow of 2025 recorded at $2.0 billion [42]. Economic Indicators - The BofA Bull & Bear Indicator has risen to 4.2, indicating a bullish sentiment in the market [9][15]. - The report suggests that the US manufacturing sector now constitutes only 8% of total nonfarm payrolls, reflecting a significant shift in the labor market [19][20].