The flow show-Sell Hubris

Sell Hubris, Buy Humiliation Scores on the Doors: crypto 62.8%, gold 26.3%, stocks 20.8%, HY bonds 8.1%, cash4.6%, US$ 4.2%, IG bonds 2.9%, commodities 1.9%, govt bonds-2.4%, oil -5.0% YTD. 14 November 2024 Investment StrategyGlobal Zeitgeist:“Not a great time to be long real estate in Washington DC.” The Biggest Picture:“sell hubris, buy humiliation”; stock market cap since Nov 5th…US+$1.8tn, EM -$0.5tn, EAFE -$0.6tn; investors all-in on Trump 2.0 =“US exceptionalism”;sotough for allocators to call top in US asset price hubris, but US$ (real effectiveexchange rate)now at 55-year high, US stocks vs world at 75-year high (Chart 2). Tale of the Tape:“the dollar is our currency, but your problem”; radicalpolicy, radicalassetmoves…investors positioned for“US risk on”into Inauguration Day; but as bullsextend, USfinancial conditions tightening, and cracks in leverage (gold, small cap, riskparity, EM) emerging as Fed cuts pricedout; further rise in long rates GT30 to 5%, shortrates GT2to 4.5% = risk reversal, bigly if banks (KBE)“bull trap”, fail to hold new highs. Michael HartnettInvestment StrategistBofAS+1 646 855 1508michael.hartnett@bofa.com The Price isRight:“ain't a party without the chips”…Wall St frontrunning Trump 2.0,sowillMain St by Q4/Q1 via labor hoarding & big inventory build ahead of tariffs…meansUS GDPbeats in Q4/Q1 best played via long US$;Wall St also pricing global bust…EAFEstocks-8%, much-loved India -10%, SOX back at 5k (200dma),“blue collar" semis (ON,MCHP, STM) dependent on global PMIs struggling…coming opportunities in“humiliated”. Elyas Galou>>Investment StrategistBofASE (France)+33 1 8770 0087elyas.galou@bofa.com Anya ShelekhinInvestment StrategistBofAS+1 646 855 3753anya.shelekhin@bofa.com US vs Global ex-US equities (relative price performance, USD) Myung-Jee JungInvestment StrategistBofAS+1 646 855 0389myung-jee.jung@bofa.com More on page 2… Source:BofA Global Investment Strategy The indicatoridentified above as the BofA Bull & Bear Indicator isintended to be an indicative metric only and may not beused for reference purposes or as a measure ofperformance for any financial instrument or contract, orotherwise relied upon by third parties for any otherpurpose, without the prior written consent of BofAGlobal Research. This indicator was not created to act asa benchmark.BofA GLOBAL RESEARCH Trading ideas and investment strategies discussed herein may give rise to significant risk and arenotsuitable for all investors. Investors should have experience in relevant markets and the financialresources to absorb any losses arising from applying these ideas or strategies.>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 11 to 13.12764781 Timestamp: 14 November 2024 11:22PM EST Weekly Flows: $97.6bn to cash, $53.2bn to equities, $6.0bn to crypto, $2.8bn to bonds,$1.6bn from gold. Flows to Know:big rotation from bonds into stocks, EM/China to US, gold to crypto… •Money markets: AUM @ new all-time high ($6.7tn–Chart 10);•Crypto: record inflow ($6.0bn–Chart 12);•Gold: biggest outflow since Jul’22 ($1.6bn–Chart 11);•Treasuries: biggest outflow since Jan’24 ($3.5bn);•IG bonds: smallest inflow YTD ($2.1bn);•Bank loans: biggest inflow since Apr’22 ($2.1bn);•US equities: biggest inflow since Mar’24 ($55.8bn);•US large cap: record inflow ($44.1bn–Chart 13);•US small cap: largest inflow since Jul’24 ($6.7bn);•EM stocks: biggest outflow since Aug’15 ($7.5bn);•China stocks: record outflow past 5 weeks ($21.1bn–Chart 14);•Utilities: biggest outflow since Mar’15 ($1.1bn–Chart 15);•Financials: weekly inflow biggest since Jan’22 ($2.6bn–Chart 17);•Materials: record inflow ($5.6bn–Chart 16). Positioning:Nov BofA Global FMSshowed big post-election shift in investor convictionof higher US growth, higher inflation, big OW of US stocks (highest allocation sinceAug'13), rotation to small cap stocks (Table 1), positioning ahead of 2025 in anticipationof US stocks being best-performing asset class (say 43% of investors), Russell 2000best-performing equity index (35%), and US dollar best-performing currency (45%). BofA Bull & Bear Indicator: dips to 5.9 from 6.2; we believe this simply signals thatextreme bullishness thus far confined to US stocks rather than all global markets &other risk assets; extreme bull US stock inflows currently offset within BofA Bull & BearIndicator by FMS cash levels rising past 4