The Flow Show-Some Like It Hot

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 analystunder the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 10 to 12. 12909916 The Flow ShowSome Like It Hot Scores on the Doors: gold 59.1%, stocks 19.6%, IG bonds 10.3%, HY bonds 10.1%, commods 6.7%, govt bonds 6.7%, cash 4.0%, bitcoin -1.8%, US$ -8.8%, oil -16.8% YTD. Zeitgeist: "Trump runs it hot, oil bounces post Russia-Ukraine fix, China keeps yuan cheap, soon all the commodity charts will look like gold; what LatAm stocks telling you." The Biggest Picture: commodities like it hot… GFC caused monetary excess, fiscal austerity = bonds smoked commodities in era of secular stagnation; but COVID caused fiscal excess, less monetary excess, plus end of globalization = commodities smoking bonds in 2020s era of political populism & inflationary growth (Charts 2 & 5). The Price is Right: natural resources, metals (Charts 3 & 4), LatAm stocks (up 56% YTD) all breaking out; we say long commodities the best “run it hot” trade in ’26, and long despised oil/energy without question the best “run-it-hot” contrarian trade. Tale of the Tape: investors bullish risk on Trump/Fed/Gen Z “puts” & tax/tariff/rate “cuts”; bond markets policing “run-it-hot” trade = biggest threat to consensus that ’26 upside in stocks & credit all coming in H1; but in Q4’25 Treasury vol @ new lows, US$ falling again, new highs in bank stocks, all allaying liquidity/credit concerns… only thing that can stop Santa Claus rally is “dovish” Fed cut causing a sell-off in long-end. Chart 2: GFC = credit>commodities; COVID = commodities>credit US corporate bonds vs commodities (total return) since 1998 Source: BofA Global Investment Strategy, Bloomberg (US corporate bonds = C0A0 Index, commodities = BCOMTR Index) BofA GLOBAL RESEARCH More on page 2… GFCCOVID261014182226'98'00'02'04'06'08'10'12'14'16'18'20'22'24'26US corporate bonds vs commodities (total return relative)04 December 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