BofA - The Flow Show Rising Suns and Setting Suns-240119

AccessibleversionTheFlowShowRisingSuns&SettingSunsScoresontheDoors:USdollar2.1%,crypto2.0%,oil1.3%,cash0.2%,commodities-18January20240.4%,HYbonds-0.8%,IGbonds-1.7%,stocks-2.0%,govbonds-2.8%,gold-3.2%YTD.InvestmentStrategyZeitgeist:"ForeignbrokerstellmeNikkeiin'24willdowhatNvidiadidin'23,whileGlobalJapanesebrokerstellmeNikkeiwilldowhatChinadidin'23"–globalinvestoronJapan.TheBiggestPicture:Nikkeiat34-yearhighs,Chinaat2008GFClows(Chart2–Nikkeiwas7katGFClow,now36k);truebullinJapanwhenyenup,stocksup,butin’24itsprospectofdeeperyendepreciationthatampsthebulls(noteleadershipshiftingfromassetreflationplaysi.e.bankstoweakyenplaysi.e.exporters),plusNikkeibeneficiaryofABC"anywherebutChina"liquidityandinvestorsstructurallyunderweight(Japan=5.5%ofACWIvs.44%in1989–Chart3).TaleoftheTape:sellersstrikeinIG,tech,JapanbutJanpriceactionineverythingelseMichaelHartnett“sloppy”asbondyieldsmovebackuponlabormarket(USunemploymentclaimsat50-InvestmentStrategistyearlows),deficits&politics;UST10-year>4¼%andfurtherUSdollarstrengththusBofASnegativeinlightlypositionedmarketbutmarketstillpricingin140bpsFedcutsin'24,+16468551508andzeitgeistfirmlybuy-the-dipasPowellpivotmeansH1upsidebiggerthandownside.michael.hartnett@bofa.comThePriceisRight:new10-yearUSTtradingrange3¾%to4¼%,investorsreverttoElyasGalou>>"own”growth,tech,AI-bubble,mono...