BofA -The Flow Show Liquidity Inequality-240125

AccessibleversionTheFlowShowLiquidity=InequalityScoresontheDoors:oil8.0%,commodities4.0%,USdollar2.2%,stocks0.9%,cash25January20240.3%,HYbonds-0.2%,IGbonds-1.4%,gold-2.6%,govbonds-2.9%,crypto-4.8%YTD.InvestmentStrategyWinners&Losers:asset/ETFwinners…cannabis28%,uranium16%,Japan(unhedged)Global8%,oil8%,semis7%,MagnificentSeven4%vslosers…rareearths-19%,renewables-17%,electricvehicles-15%,Chinatech-11%,ARKK-12%,Korea-11%YTD.TaleoftheTape:record$12.1bninflowstoEMequities($11.9bntoChina)asPBoCeasesafterChinastockshitOct'08GFClows&exodusofforeigninvestors;epicdeflationofpropertystocks(Chart4)makesChinatheworld’smostenticingcontrarianlong“trade”(no-onebelievesit’san“investment”).ThePriceisRight:Q4USnominalGDPuphot6%YoY,upsizzling40%sinceCOVIDlow(fastestexpansionsincestagflationary'70s–Chart3)…the“governmentbubble”hugedriver…fiscaldeficit7.5%ofGDPunderBiden,6.6%underTrump,bothbiggestsinceGreatDepression/WW2(Chart7)…neitherlikelytocampaignon“balancingthebudget”.TheBiggestPicture:Goldilocksmacro,Goldilocksyields(10-yearUST3¾%to4¼%),MichaelHartnettUSstockssurgingtonewhighsdrivenbymonopolistictechasAI“babybubble”growsInvestmentStrategist(Chart2);rates,penetration,regulation3catalyststhatpoptechbulls/bubble;regulatorsBofASonprowlbutneedUS10-yearrealratesbackto2½%(currently1¾%)topopthisone.+1646855150...