the flow show-The Fail Risks of ‘25

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. 12895138 The Flow Show The Fail Risks of ‘25 Scores on the Doors: gold 52.9%, stocks 21.4%, bitcoin 14.9%, IG bonds 9.9%, HY bonds 9.4%, govt bonds 6.7%, commods 6.1%, cash 3.6%, US$ -8.3%, oil -16.0% YTD. Zeitgeist: “I'm long AI, and voting Mamdani,” 20-something Brooklyn math teacher. Zeitgeist: “AI already owns the stock market, so bull case now is AI soon owns the bond market and drives yields lower.” The Biggest Picture: biggest bear risks heading into 2025 were disorderly rise in bond yields, trade war and Fed hikes (see BofA Global FMS Nov’24 - Chart 2); tail risks failed, 10 months later US Treasury volatility (MOVE) at lowest level since 2021 (Chart 3), US-China trade deal, and Fed cutting rates with stocks at highs, credit spreads at lows…why gold up 50%, international 30%, US stocks 20%. Tale of the Tape: NYC 5-year CDS spreads pinned to lows (60bps – Chart 5); rate cuts and reach for yield means bonds aren’t worried populist policies to address inequality (64% say cost of living biggest NY mayoral election issue) = higher inflation and debt risks. The Price is Right: Oracle 5-year CDS highest level in 2 years (Chart 6); AI capex boom paid for by revenues, cash flow…and debt; AI via job losses bullish US Treasuries, but in corporate bond tech spreads have likely troughed…short hyperscaler bonds in ’26. Chart 2: The Fail Risks of 2025 Nov’24 Global FMS…”Which of the following developments would be most bearish in ‘25?” Source: BofA Global Fund Manager Survey BofA GLOBAL RESEARCH More on page 2… 50%30%15%3%0%01020304050Disorderly rise in bond yields on debt fearsGlobal trade warFed rate hikesUS tax hikesHigher oil price on bad geopoliticsPost-Trump (Nov 6th - 7th)30 October 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