美银：The Flow-When Jerome met Donald Show

Investment Rating - The report indicates a mixed investment sentiment with a focus on equities and bonds, highlighting a potential risk-on environment as bond yields remain stable [2][12]. Core Insights - The report emphasizes that the US economy is showing signs of slowing down, with stock market breadth at lows and a divergence between value and growth stocks [3][25]. - There is a notable shift in investment flows, with significant inflows into bonds and materials, while healthcare and tech sectors are experiencing outflows [12][57]. - The BofA Bull & Bear Indicator has risen to 6.3, suggesting a bullish sentiment but cautioning that it may approach sell signals if certain inflow thresholds are met [15][18]. Summary by Sections Market Performance - Bitcoin leads year-to-date performance at 28.0%, followed by gold at 27.2%, while oil and the US dollar show declines of -7.4% and -9.3% respectively [2]. - The report notes that the equal-weight S&P 500 is at a 22-year low compared to the market-cap weighted index, indicating a narrowing market breadth [3]. Historical Context - The report references historical events, such as Nixon's economic policies in 1971, to draw parallels with current market conditions and potential Fed actions [4][19]. - It discusses the implications of past central bank decisions and their impact on market dynamics, particularly in relation to inflation and interest rates [19][25]. Investment Flows - Recent weekly flows show $15.7 billion into bonds, $5.8 billion into crypto, and $4.8 billion into stocks, indicating a shift in investor preferences [12][55]. - BofA private clients have allocated 63.9% of their assets to stocks, with a notable trend of inflows into utilities and materials [14][62]. Valuation and Risk Indicators - The report highlights that the current trailing P/E ratio of the "Magnificent 7" is 44x, suggesting elevated valuations compared to historical averages [25]. - The BofA Global Breadth Rule indicates that only 64% of MSCI ACWI equity indices are trading above their 50/200-day moving averages, a level below the sell signal threshold [18].