BofA-The Flow Show Nyet Zero-230825.pdf
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Tradingideasandinvestmentstrategiesdiscussedhereinmaygiverisetosignificantriskandarenotsuitableforallinvestors.Investorsshouldhaveexperienceinrelevantmarketsandthefinancialresourcestoabsorbanylossesarisingfromapplyingtheseideasorstrategies.>>Employedbyanon-USaffiliateofBofASandisnotregistered/qualifiedasaresearchanalystundertheFINRArules.Referto"OtherImportantDisclosures"forinformationoncertainBofASecuritiesentitiesthattakeresponsibilityfortheinformationhereininparticularjurisdictions.BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Refertoimportantdisclosuresonpage10to12.TheFlowShowNyetZeroScoresontheDoors:crypto38.1%,stocks13.4%,HYbonds5.9%,gold5.1%,cash3.1%,IG2.9%,commodities1.0%,USdollar-0.1%,govtbonds-1.2%,oil-1.7%YTD.Winners&Losers:tech's"Magnificent7"up93%vs.USregionalbanksdown37%&Chinarealestatebondsdown55%YTD...losersstilllosing&“nouveaubulls”hopingnomagnificentdouble-topinMagnificent7(Chart4).TaleoftheTape:bestcorrelationpast15yearsiscentralbankliquidity(insanesurgefrom$5tnto$25tn)&techstocks(Nasdaq2kto16k);centralbankbalancesheetsdown$3tnyetNasdaqwantsnewhighs(Chart3)…wesaytech=H2troubleratherthaneraofnewAIrules(like"excesssavings"forMainSt,“excessliquidity”torunoutforWallSt).ThePriceisRight:25%ofTollBrothers’Q3newhomebuyerspaidincash…jobs,fiscalexcess,millennial"YOLO,"boomer"guilteconomy"…USconsumerlaughingat5%rates.THEBiggestPicture:EM87%worldpopulation,76%oilsupply,73%CO2emissions,54%FXreserves,46%nuclearweapons(just20%globalequitymarketcap–Chart2);new"BRICS-11"politicalblocdominatesEM(holds$1.5tnofUSTreasuries);politics&policiesofbothG7economies&BRICS-11signalendofglobalization…inflationary&hindergoalsofnetzero&peace.Chart2:NyetZeroEmergingMarketsvs.DevelopedMarkets(%ofworld)Source:BofAGlobalInvestmentStrategy,WorldBank,IMF,CIAWorldFactbookBofAGLOBALRESEARCHMoreonpage2…0%10%20%30%40%50%60%70%80%90%100%PopulationLandareaOilproductionCO2emissionsEnergyconsumptionGDPatPPPFXreservesGDPatmarketrateNuclearweaponsIntellectualpropertyMarketcap%ofworldEmergingmarketsDevelopedeconomies25August2023InvestmentStrategyGlobalMichaelHartnettInvestmentStrategistBofAS+16468551508michael.hartnett@bofa.comElyasGalou>>InvestmentStrategistBofASE(France)+33187700087elyas.galou@bofa.comAnyaShelekhinInvestmentStrategistBofAS+16468553753anya.shelekhin@bofa.comMyung-JeeJungInvestmentStrategistBofAS+16468550389myung-jee.jung@bofa.comChart1:BofABull&BearIndicatorDownto4.1from4.2Source:BofAGlobalInvestmentStrategyTheindicatoridentifiedaboveastheBofABull&BearIndicatorisintendedtobeanindicativemetriconlyandmaynotbeusedforreferencepurposesorasameasureofperformanceforanyfinancialinstrumentorcontract,orotherwiserelieduponbythirdpartiesforanyotherpurpose,withoutthepriorwrittenconsentofBofAGlobalResearch.Thisindicatorwasnotcreatedtoactasabenchmark.B