BofA Global Research-The Flow Show Take a Hike

AccessibleversionTheFlowShowTakeaHikeScoresontheDoors:crypto51.9%,oil19.6%,gold15.1%,commodities11.2%,stocks11April20247.2%,USdollar3.9%,cash1.5%,HYbonds0.5%,IGbonds-2.3%,govtbonds-5.0%.InvestmentStrategyZeitgeist:"BiggestpieceofM&Ainpast12monthswasthemergerofTreasury&Fed.”GlobalTheBiggestPicture:10-yearannualizedreturnofUSTreasuriesat65-yearlow(0.6%-MichaelHartnettChart2);2020seraofwar,protectionism,fiscalexcess,scarceenergy/housing/labor=InvestmentStrategisthigherinflation&highercostofcapitaluntilrecessionsparks“buybondhumiliation.”BofAS+16468551508TaleoftheTape:"ABB"(AnythingButBonds)Bullincitinggreedforinflationhedges&michael.hartnett@bofa.commonopolisticcashflows(newhighsgold&Magnificent7)+fearofleverage(seeREITs,KRE,RTY)&duration(XBI);“nolanding”probabilityrising…rarefortech&commoditiesElyasGalou>>bothtop-of-the-price(Chart6),butconsistentwithnolandingandvery1999.InvestmentStrategistBofASE(France)ThePriceisRight:USCPIoncoursetobe4-5%byNovUSelection(Chart3)++33187700087nominalGDP+5-6%Q1saysAtlantaFed(surpriseisEPSdoesnotsurprisetoupside–elyas.galou@bofa.comChart4)+Chinasleepinggiantwaking…littlewondernominal&realratesbreakinghigher…higherrealrates(2.5-3%thistime)alwaysendtheparty;butgold/techalsosayAnyaShelekhinparlousstateofUSgovtfinancesmeansinevitableICC,YCC,endofQTtopreventdebtInvestmentStra...