the flow show-3B Bulls

Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 10 to 12. 12738887 The Flow Show 3B Bulls 1 US Census population projections + same 2020 voter turnout rates Scores on the Doors: gold 21.6%, stocks 13.6%, crypto 9.1%, HY bonds 6.9%, IG bonds 4.8%, cash 3.7%, govt bonds 2.2%, US dollar 0.3%, commodities -2.0%, oil -6.1% YTD. Zeitgeist: “Remember that scene in Die Hard when Bruce Willis has to escape barefoot across a floor of shattered glass…that’s what trading this tape feels like between now and the election”. The Biggest Picture: 2024 US election first in past 30 years when Boomers no longer majority voting bloc…new “era” as 65 million Gen Z & Millennial voters “Swiftly” set to outnumber 50 million Boomers1 in Nov (Chart 2); latest win probability Harris 56%, Trump 47% (Table 1)…more relevant to Wall St is probability of “sweep” by either party down to 3-month lows, allaying bond & stock investor fears. The Price is Right: gold at all-time highs (best hedge against 2025 inflation reacceleration); best contrarian ”buy the 1st rate cut” play = commodities i.e. oil & industrial metals…thanks to China weakening (bond yields all-time lows, real estate stocks 16-year lows) commodities only asset class (outside SOFR Secured Overnight Funding Rate market discounting 240bps Fed cuts next 12 months) priced for hard landing. Tale of the Tape: bulls point to credit spreads, bears point to credit card stocks; bulls say SOX/XLK leadership defended key technical floors & defensive outperformance overdone (UTIL vs TRAN @ 1-year highs), bears say nothing good happens when bond yields & bank stocks fall together (correlation has flipped positive - Chart 4); payrolls (+/-100k) to resolve autumn ambiguity…until then risk rotates rather than rips or retreats. Chart 2: Election 2024: 65mn Gen Z & Millennial voters vs 50mn Boomer voters US presidential election voters by generation (Millennials + Generation Z and Baby Boomers) Source: BofA Global Investment Strategy, US Census Bureau. *2024 based on US Cens