BofA The Flow Show: A Tail of Two Cities (Highlights)

Key takeaways Risk-off until US$ peaks; policy panic limits downside unless MDY "Buy humiliation"... add duration as bonds getting close to offering equity-like returns Capex/inflation support "it's the railroads this time" bull case; yields & credit event risk do not Scores on the Doors: oil 61.8%, global stocks 12.1%, US stocks 12.0%, US dollar 3.8%, cash 2.7%, HY bonds -0.3%, IG -3.2%, bitcoin -3.4%, gold -3.8%, govt bonds -4.1% YTD. Q3 Winners & Losers: winners... bitcoin 43%, oil 42%, software 18%, Mag7 11%; losers... zero-coupon bonds -15%, semis -11%, industrials -10%, Korea -8%. The Price is Right: best of times, worst of times... tighter financial conditions crushing equity breadth... 400 SPX stocks trading below 50dma, 300 stocks Tale of the Tape: it's risk-off until US$ peaks; US$ spiking on credit event risk... Aussie dollar, French bonds, risk parity (RPAR), bond insurers (AGO), tech CDS (ORCL)... deleveraging price action; threat of policy panic (open-ended UST buybacks, YCC... can't let yields hit AI capex boom/stocks into midterms) limits downside unless small/mid-cap (MDY The Biggest Picture: bull case is "it's the railroads this time"; 40% peak concentration for i