BofA_The Flow Show_“Events, dear boy, events”_20240105

AccessibleversionTheFlowShow“Events,dearboy,events”ScoresontheDoors:USdollar1.1%,oil0.8%,crypto0.5%,commodities0.0%,cash04January20240.0%,HYbonds-1.0%,gold-1.1%,IGbonds-1.2%,govbonds-1.4%,stocks-1.7%YTD.InvestmentStrategyTaleoftheTape:Fedandyieldsdictatingcreditandstocks;lowerinflation,lowerratesGlobal=+veriskassets,higherunemployment,lowerrates=-ve;givenupcomingbigbondsupplytorefinancegovt&corpsectors(UST$1.8tnin'23,USIG$0.8tn,10%USHYMichaelHartnettandloansmaturenext2years),criticalFedeasesH1toavertcorporatescuttingjobsInvestmentStrategistandcapexH2.BofAS+16468551508ThePriceisRight:’23large-capgrowthoutperformanceofvalueby33ppt(2ndbiggestmichael.hartnett@bofa.combeatsince’79–Chart3),small-capvalue(by30ppt)andgrowthstocks(24ppt)drivenbyhigheryields,aversiontoleverage;andyieldcollapsefrom5%to4%past10weeksthusElyasGalou>>bullishleverage&breadth;just2%expectlowerrates,18%loweryieldsin’24saysBofAInvestmentStrategistDecFundManagerSurvey;bigriskisQ4bonds,bullion,breadthrallyreversesearlyBofASE(France)doors’24.+33187700087elyas.galou@bofa.comTheBiggestPicture:Decpayroll:NFP>220k&AHE>0.3%AHE=GT10to4¼%...NFP<140k&AHE<0.1%=GT10to3¾%;notedisconnectofcontractingISM&resilient“noAnyaShelekhinlanding”payrolls(Chart2),strongstocksanddeceleratingjobopenings(Chart4).InvestmentStrategistBofASChart2:ISMiscontracting,N...