The Flow Show：At the lowS...

Accessibleversion BofAGLOBALRESEARCHBofASECURITIES TheFlowShow Atthelows.. ScoresontheDoors:commodities34.5%,oil17.6%,USS14.6%,cash0.5%,15September2022 gold7.1%,HY-14.9%,IG-17.6%,stocks-18%,govtbonds-18.6%,bitcoin-57%YTD.InvestmentStrategy Global HeardontheStreet:“Everyoneworriedaboutretumofcapital,notretumncapital. Destination:USCPIunlikelytodropbelow4-5%anytimesoon(Chart8)..Fedfunds&BofA USyieldsheadingto4-5%next4-5months.U5unemploymentrateheadingto4-5%Data next4-5quarters;worldmaxbearishbutwesaynewhighsinyields=newlowsinstocks. Analytics BiggestPicture:YTDannualizedlossingovemmentbondsworstsince1949(Chart2). ThePriceisRight:yesit'sfashionweekfornouveauuber-bears,butinflationshock ain'tover,financialconditionstightening:goldbreakingdownasUSrealyields1%from -1%6monthsago,USmortgagerates@6%(firsttimesinceNov°08),CNYnowabove 7.00..ifBoJfailstobudgeonYieldCurveControl(YCC)nextweekriskisquickJPY>S150, UST10-year>4% MichaelHartnett ChiefinvestmentStrategist +16468551508 lows;wesaynibbleatSPX3600,biteat3300,gorgeat3000. ElyasGalou BofASE(France) +33187700087 Chart2:Globalgovemmentbondsontrackforworstannuallosssince1949WordgovemmentbondGDP-weightedretumindex(annualchange,%) 50% WoridGovtBondGDPWeightedRetumnIndex(annualchange,%) elyaspaioubnfacon Sunfsa-Sun/owmvestmentstrstegist -16468550389 40%myung.jce.jung.@bofa.com 30% 20%Chart1:BofABull&BearIndicator 10% 0% Movesupto0.3fiom0.0 -10% -20% -30% -40% WWI UKoffeoldMarshall Postwwistandardplan 2022 Bearish Source:BofAGiotelivestnentStrategy.GlosaFirendalDetaisaseFinaeon.Estimatefor2tz2annuelizcdasofendofAugus:Z2 HO953TVBC19Y8 Source:BofAGiobellivestntentStrateg TheincicateriSertifiedaboveasthaBotABul&Bear Moreonpage2.. Indictarisirtendcdtobeanineictivemetricanlyandmayretbeusedforreferercepurpasesorasancssureofperformarceforanyfinancalinstrurrentorcontract, Tradingideasandinvestmentstrategiesdiscussedhereinmaygiverisetosigrificartriskandare notsuitableforallinvestors.nvestorsshouldhaveexperienceinrelevantmarketsandthefinancialresourcestoabsorbanylossesarisingfromapplyingtheseideasorstrategies. >>Employedbyanon-USaffllateofBofASandisnotregistered/qualifiedasaresearchanalyst undertheFINRAnules upo/ueJ0,s/edpukn/quodnpo(21a5euupoJ0 purpose,withoutthepriorwrittenonsert.ofBctAGlotelResesrch,Thesirekcatorwasnotorertedtostas asehnark. 8fAGLOBAIRESEAKCH Referto'OtherImportantDisclosures'forinfommationoncertainBofASccuritiesentitiesthattakc ponsibilityfortheinformationhereininparticularjurisdictions. BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearchreports.Asaresult,imvestorsshouldbeawarethatthefirmmayhaveaconflictof interestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthis reportasonlyasinglefactorinmakingtheirinvestmentdecision. Refertoimportantdisclosuresonpage10to12.12462658 Timestamp:15September202208:37PMEDT WeeklyFlows:inflowtoequitiesS6.2bn(H1S189bninflowtostocks,H2thusfar $17bnoutflow),outflowsfromgoldS0.6bn,bondsS2.8bn,cash$4.1bn FlowstoKnow:recentinflowstoIGcredithavestalled(Chart9);passiveequityoutflows2ofpast4weeksbutthusfarmodest(Chart10);31*weekofEuropeequityoutflows(Chart12). BofAPrivateClients:$3.OtnAUM:62.9%stocks,18.6%bonds,11.4%cash;BofAprivateclientsbuybondsfor29*consecutiveweek,addcash,sellstocks7past9weeks, BofABull&BearIndicator:upto0.3from0.0(improvingbondflows,lessbearishhedgefundpositioning). Chart3:SharpdropinUSstrategikpetroleumreservesin2022Chart4:Bo)’'spolicyrateis-0.1%,ECB’sis1.25%,Fed’sis2.25%(soon USStrateg<PetroleumReseve(mnbamels) tobe3%) 800 700 Centralbankpolicyrate(%) 656mmbemeECB Jur2 60 0 400434mmbanek 0OE 1SSitilegiPecaikumPreswe(mmlenrk) 700 2707919,2(Z1.019090#0)0C0696p626060)9892) 9891(06167630405060708091011171314151612181970717333 SeurteAdAGithalhermrtSirerag,iserterg BotA,GLOBALRESEARCH SearceBdfGiotelimestmetStreg/.imbegHse:(SFeckeralreerebropen(etral Bak,Bsikofspen(Hol1MaisHefireancing0perationratefertEC3. Rs[6,GI(08AI8FSFARCH Wonderland:wondrouseventrisknext12weeks...Sept21*FOMC...75bps-100bpspriced-in Sept22Boj..veryimportantforglobalmarkets..nobudgingonBoJ'sYCCdespite allcentralbanksinworldbarChinahikingrates.-yento5150onratedifferentials, fearsofdebasement&capitalflight(Chart4) Sept25°:Italyelection..likelyanothershifttopopulistrightinEurope(seealsoUK, Sweden) Oct16*:ChinaCCPPolitburo/congres5-potentialrelaxationofCOVID&fiscalpolicyNov8*:USmidtermelections(lastFMSshowedinvestorsexpect..) Nov15°:G-20meetinginBali..hugelyimportantmeeting,inourview,givennew markets,macro&geopolitics..marketsmaypressurepolicymakersfornewUS dollar°Plazaaccord"viaUSdollarspike;pluspotentialnegotiationsre Russia/Ukraine ouerssnyuo,denaod,ejouaaounouuejojaupeapussan InflationisSecularnotTransitory:USfreightrailwayworkers14%payrise,USstrategicoilsupplydownto434mnbamels(lowestsince1984-Chart3),Germany nationalizingutilitysector,EUsteelsectorseekinggovtaid,G7pricecontrolsonenergy prices,UK/EUfiscalpolicypanicapproaching75Obn,G7significantlyraisingmilitaryspending-geopoliticalpolicyonRussia/Ukraine,China/Taiw