the flow show 0801

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 11 to 13. 12859883 The Flow Show Different Gravy Scores on the Doors: gold 24.4%, bitcoin 23.7%, stocks 11.9%, HY bonds 7.1%, IG bonds 7.0%, govt bonds 5.3%, commodities 4.5%, cash 2.5%, oil -3.2%, US$ -7.9% YTD. Zeitgeist: “The railroad stocks were more than 60% of market cap in the late 1880s… why can't the Magnificent 7 get to the same level.” The Biggest Picture: US railroads, dominant revolutionary monopolies, peaked at 63% of US market cap in 1881 (Chart 2); other new paradigm concentration peaks… Nifty Fifty 40% of SPX (‘72), Japan 45% of ACWI (‘89), tech 40% of SPX (‘00); US tech vs SPX at 100-year high (Chart 4) in ’25, and Magnificent 7 stocks 35% of US market cap. Tale of the Tape: biggest July “pain trade” = 3% rally in US dollar, after 11% H1 decline; catalysts… extreme short positioning, hawkish Fed, RoW impacted by Trump tariff rates; we say secular US debt & deficit dynamics unchanged, so shorts go back on as US dollar DXY index approaches 103 (200-day moving average). The Price is Right: 2nd biggest July “pain trade” = 20bps flattening of US yield curve; we say it flattens further (UST 10-year yield falls toward 4%) until data flips Fed dovish (Q3’24 Fed cut 50bps, yields ripped higher), but Fed hawkish Q3’25 = long-end anchored. Chart 2: Railroads = 63% of US stock market in 1881… most dominant innovation sector ever Railroads as % of US stock market cap Source: BofA Global Investment Strategy, Global Financial Data BofA GLOBAL RESEARCH More on page 2… 63%18810%10%20%30%40%50%60%70%1828184818681888190819281948196819882008Railroads % of US stock market cap31 July 2025 Investment Strategy Global Michael Hartnett Investment Strategist BofAS +1 646 855 1508 michael.hartnett@bofa.com Elyas Galou >> Investment Strategist BofASE (France) +33 1 8770 0087 elyas.galou@bofa.com Anya Shelekhin Investment Strategist BofAS +1 646 855 3753 anya.shelekhin@bofa.com Myung-Jee Jung Investment Strategist BofAS +1 646 855 0389 myung-je