Trump’s Comments Fuel Uncertainty Over Fed Leadership President Trump recently made headlines by saying he “knows who he is going to pick” as the next Federal Reserve chair — though he declined to name the individual publicly. At the same time, he reiterated harsh criticisms of current Fed Chair Jerome Powell, complaining that the Fed has been too slow to cut interest rates. While Powell’s term doesn’t end until May 2026, Trump’s remarks — and the rapidly rising market odds that Kevin Hassett will be the ...

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 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].

Summary of Key Points from the Conference Call Industry Overview - The report discusses the positioning and sentiment in the US equity market, highlighting the bullish trends and investor behaviors in various asset classes, including equities, fixed income, and commodities. Core Insights and Arguments 1. **US Equity Positioning**: - Bullish positioning in US equities has increased, with out-of-the-money (OTM) call implied volatility rising above at-the-money (ATM) volatility, reaching above the 90th percentile since 2012 [1][3][9]. - The NAAIM index decreased over the week, but the median investor remains bullish [7][8]. 2. **ETF Flows**: - Flows into leveraged US equity ETFs have turned positive, indicating renewed investor interest [1][11]. - Conversely, flows into low-volatility ETFs have remained weak, with cumulative flows since 2016 now negative [1][11]. 3. **Foreign vs. Domestic Investment**: - Foreign investors have recently increased their purchases of European equities, contrasting with domestic investor behavior [1][30]. - Emerging market (EM) equities continue to see positive flow momentum [1][32]. 4. **Fixed Income and Money Markets**: - There is strong flow into fixed income and money markets, particularly in EM local and Asia-Pacific investment grade (IG) bonds [1][7]. - Gold physical ETF holdings have seen a modest decline after a selloff but remain elevated, with values increasing alongside prices [1][6]. 5. **Risk Appetite Indicators**: - The Risk Appetite Indicator is neutral at 0.34, with negative momentum at -0.21, suggesting a cautious approach among investors [3][4]. - Pricing in safe-haven assets indicates that risk-off hedges are becoming more costly, as seen in rising OTM skew in gold call options [3][4]. 6. **Investor Behavior**: - Active asset managers have shown increased bullishness, although slightly less than the previous week [3][4]. - Hedge fund net exposure remains above 80%, following a spike to the highest level since 2022 [3][4]. 7. **Call and Put Activity**: - The traded volume of equity calls relative to puts reached an historical high over the last month, indicating strong bullish sentiment [3][12]. - The call skew across the Magnificent 7 stocks is at the 91st percentile, reflecting heightened bullish sentiment in these key stocks [9][13]. Other Important Insights - The report emphasizes the importance of considering multiple factors in investment decisions, suggesting that investors should remain vigilant about market dynamics and positioning [2]. - The sentiment and positioning indicators suggest a complex market environment where bullish trends coexist with caution in risk management [3][4][5]. This summary encapsulates the key points from the conference call, providing insights into the current state of the equity market, investor behavior, and asset flows.

Core Insights - The "October Effect" is a psychological belief that stocks tend to decline in October, although historical data does not support this notion [1][8] - October 2025 has seen increased market volatility due to a government shutdown and economic uncertainty, yet the market is reaching new historic highs [2] - Investors are showing a strong preference for large-cap equity ETFs, particularly those tied to the S&P 500, despite concerns about economic growth [3][4] ETF Flows and Performance - Equity ETFs accounted for 50% of all ETF asset flows in October, with a notable focus on large-cap exposure [3] - The top three ETFs have captured approximately 37% of all equity ETF flows, with significant inflows into the Invesco QQQ Trust, Vanguard Total Stock Market ETF, and others [4][6] - Conversely, small-cap ETFs like the iShares Russell 2000 and Invesco S&P 500 Equal Weight ETF have experienced significant outflows, indicating a lack of diversification interest [4] Gold Investment Trends - Gold has emerged as a favored asset class, attracting substantial investment as a hedge against inflation and market volatility [7] - In October, gold ETFs have seen significant inflows, with the SPDR Gold Shares, SPDR Gold Minishares Trust, and iShares Gold Trust leading the way [9] - Gold's performance has been strong, with a 7% gain in October, reinforcing its status as a safe-haven asset [8]

Investment Rating - The report indicates a positive investment sentiment with a focus on buying the dip in US equities, particularly in single stocks, which saw significant inflows [9][18]. Core Insights - Institutional and retail clients were net buyers of US equities, with a notable $4.1 billion inflow into single stocks, marking the fifth highest weekly inflow since 2008 [9][18]. - The report highlights a shift back to large-cap stocks, with inflows observed across all market cap sizes, particularly in Communication Services and Health Care sectors [9][18]. - Hedge funds continued to sell US equities for the fifth consecutive week, contrasting with the buying behavior of institutional and retail clients [9][18]. Summary by Sections Client Flows - Institutional clients led the buying activity, marking the largest weekly inflow since November 2022, while retail clients also participated after a period of selling [9][18]. - Hedge funds were the largest net sellers, with cumulative flows showing a significant outflow trend [5][22]. Sector Performance - Inflows were recorded across all 11 sectors, with Communication Services and Health Care leading the way, alongside notable inflows in the Energy sector [9][18]. - The report notes that clients sold equity ETFs for a second week, with outflows primarily from Tech and Materials sectors, while defensive sectors like Health Care and Real Estate saw inflows [9][18]. Size Segmentation - All market cap segments (large, mid, small) experienced inflows, with small caps showing resilience with inflows in five of the last seven weeks [9][18]. - The report indicates a preference for small-cap and value ETFs, contrasting with the outflows from large and mid-cap ETFs [9][18]. Corporate Buybacks - Corporate buybacks have slowed but are expected to pick up during the earnings season, with a focus on Tech and Financials dominating the buyback activity over the last three months [9][18].

Core Insights - BlackRock reported strong quarterly results, beating expectations on both revenue and earnings, with assets under management reaching a record $13.5 trillion [1][5]. Company Performance - The positive performance is attributed to strong fund flows and a strategic focus on expanding into alternative investments, private assets, and infrastructure [2][5]. - Digital assets, commodities, and fixed income also contributed significantly to the quarter's results, alongside core equity ETFs [5][6]. - BlackRock's shares have outperformed the asset management peer group, with a year-to-date increase of approximately 13% [10]. Market Environment - The current investment climate is characterized as "risk-on," benefiting firms like BlackRock, with expectations for continued strong performance in the fourth quarter [5][6]. - Macro factors, particularly US-China trade relations, may impact market performance, but BlackRock is positioned to navigate these challenges [3][4]. Competitive Position - BlackRock holds a competitive edge due to its efficient fee structure and a strong portfolio of ETFs, which are less susceptible to market volatility [12][14]. - The company is focusing on innovation and diversification to maintain its competitive position and enhance its business model [12][14]. Future Outlook - The outlook for 2026 suggests that macroeconomic risks will be more significant than inherent risks to BlackRock, as the company prepares to strengthen its product offerings [13][14].

Investment Rating - The report indicates a bullish sentiment with the BofA Bull & Bear Indicator rising to 6.5, reflecting strong inflows into stocks and a positive outlook for global equity markets [7][11]. Core Insights - There have been record inflows into global equity ETFs, totaling $152 billion over the past three weeks, marking the largest inflow on record [2][16]. - The report highlights a shift in investment themes from war to peace, and from US exceptionalism to global rebalancing, suggesting a favorable environment for gold and international equities in the second half of the 2020s [2][3]. - The report notes a significant outflow from Treasuries, amounting to $7.5 billion, which is the sixth-largest outflow ever recorded [10]. Summary by Sections Market Flows - Global equities saw inflows of $114 billion in the past three weeks, the third highest ever, with $26 billion inflows to stocks and $19.9 billion to bonds [16][41]. - Private clients have allocated 64.7% of their assets to stocks, the highest since March 2022, while bond allocations have decreased to 18.0%, the lowest since May 2022 [11][41]. Investment Themes - The report identifies entrenched trends favoring corporations over governments and passive over active management, with a notable shift towards national security and border control [2][3]. - The "Magnificent 7" companies are reallocating cash flow towards capital expenditures in the AI sector, indicating a significant trend in technology investment [17][38]. Sector Performance - The technology sector experienced the largest inflow of $9.3 billion, while healthcare saw a minor inflow of $33 million, contrasting with a record outflow of $17 billion for the sector [16][42]. - Financials and materials sectors also saw substantial inflows, with $3.3 billion and $5.9 billion respectively, indicating strong investor interest [16][42]. Economic Indicators - The report notes that 80% of global stock indices are trading above their 50-day and 200-day moving averages, suggesting a robust market breadth [11]. - The report emphasizes that no central bank has raised rates in the past two months, which may contribute to the current bullish sentiment in the markets [18].

Investment Rating - The report indicates a shift in client flows with a focus on equity income, favoring value over growth, and highlights the first large-cap outflows in two months [1][9]. Core Insights - Clients sold large-cap stocks for the first time in two months, resulting in the largest outflows in over two years, while small-cap stocks saw inflows [9][24]. - Institutional clients were the biggest net sellers, while private clients were net buyers in the past 12 months [7][19]. - The report emphasizes a trend of clients favoring equity ETFs, particularly in the value category, while selling growth ETFs for the first time in five weeks [9][22]. Summary by Relevant Sections Client Flows - BofA Securities clients were net sellers of US equities for the second consecutive week, with outflows from single stocks amounting to $5.2 billion, the largest since October 2024 [9][19]. - Hedge funds, institutional, and private clients were all net sellers, marking a notable shift in client behavior [9][19]. Sector Performance - Real Estate stocks experienced the largest inflows for the fourth consecutive week, while Technology stocks saw significant outflows [9][16]. - Clients sold stocks in eight out of eleven sectors, with Technology and Communication Services leading the outflows [9][15]. Size Segmentation - Large-cap stocks faced substantial outflows, totaling $49.1 billion year-to-date, while small and micro-cap stocks recorded inflows of $4.0 billion [13][24]. - The report highlights that small-cap stocks have seen inflows in three of the past four weeks, contrasting with the trend in large-cap stocks [9][24]. ETF Trends - Clients bought Blend and Value ETFs for the fourth consecutive week, while Growth ETFs were sold for the first time in five weeks [9][22]. - The report notes that clients bought ETFs in nine out of eleven sectors, with Technology ETFs leading despite the outflows from Technology stocks [9][22].

Investment Rating - The report indicates a mixed sentiment with institutional clients being net sellers while private clients have shown net buying behavior [5][7][20]. Core Insights - The report highlights that small cap inflows have continued, with clients showing a preference for small cap stocks over mid caps, while large caps also saw some buying activity [9][25]. - Private clients have turned net sellers for the first time this year, with a rolling four-week average of equity flows turning negative [9][20]. - Institutional clients have been net buyers for six consecutive weeks, marking the longest streak since late 2022, while hedge funds have also shown buying activity [9][20]. - The report notes that corporate client buybacks have accelerated, surpassing typical seasonal levels for the first time in ten weeks [9]. Summary by Client Type - **Institutional Clients**: The largest net sellers post-crisis, with cumulative flows showing significant outflows [5][7]. - **Private Clients**: Have been the only cumulative net buyers year-to-date, but recent trends indicate a shift to net selling [9][20]. - **Hedge Funds**: Showed a buying trend for the second consecutive week, contrasting with the selling behavior of private clients [9][20]. Summary by Sector - **Technology, Consumer Services, and Staples**: These sectors saw the most buying activity from clients [9]. - **Industrials, Financials, and Utilities**: Experienced the largest outflows, with utilities facing near-record outflows in recent weeks [9][20]. - **Equity ETFs**: Clients favored growth ETFs over value ETFs for the first time in six weeks, indicating a shift in investment strategy [9]. Summary by Size Segment - **Small and Micro Caps**: Continued to attract inflows, while mid caps saw outflows [9][25]. - **Large Caps**: Also experienced buying activity, indicating a diversified interest across market capitalizations [9][25]. Summary by Investment Style - **Growth vs. Value**: Growth ETFs have seen greater net flows compared to value ETFs, suggesting a preference for growth-oriented investments [9].