BofA Global Research-The Flow Show If the dove don’t fit…-107692524

AccessibleversionTheFlowShowIfthedovedon’tfit…ScoresontheDoors:crypto30.7%,oil15.2%,gold14.8%,commodities9.6%,US18April2024dollar4.8%,stocks3.7%,cash1.6%,HYbonds-0.3%,stocks(equal-weighted)-1.8%,IGbonds-3.0%,govtbonds-5.5%YTD.InvestmentStrategyGlobalZeitgeist:Canadajackingupcapitalgainstaxratesfrom50%to67%...highlyindebtedWesterngovernmentshavepromisestokeep,warstofund…meanshigherinflation,higheryields&highertaxation…untillikelycentralbankbailoutofpublicsector.TheBiggestPicture:riskassetscorrectinginQ2as“goodnews=good”inQ1flipsto“goodnews=bad”;AprilBofAGlobalFMS(seenote)saysinvestorsmostbullishsinceJan’22justasratecutcatalystnolongera“lock”;bullssaynothingmorehealthythan“back’n’fill”correction;bearssaywatchUSgrowthstocks(strugglingtobreaktonewhighs–Chart2)&HYbonds(Chart3)tosignalmoresinistertransitionto“badnews=bad.”ThePriceisRight:basedonprice(Table1),flows&positioningthecontrarian“paintrades”topositionforsurpriseboutof“badnews=bad”…longbonds-shortstocks,longcash-shortcommodities,longChina-shortJapan,longstaples-shorttech&industrials.TaleoftheTape:weirdtoseesimultaneousstrengthintech(annualizing21%YTD),MichaelHartnettcommodities(47%)&USdollar(16%);happenedinonly5ofpast60years…1969,1983,InvestmentStrategist1999,2016,2021(seerankedassetpricereturnsbydecade–Charts4-10)…yearsofBofASstim...