Hotter for Longer

BofA Global Research confirms the onset of a durable industrial expansion and an inflationary boom, advising a rotation into banks, commodities, and small-cap value.

Key Takeaways

• 1.The new industrial cycle is durable and expanding, supported by record capital goods orders and tight supply capacity extending into 2028-2029.
• 2.Investors should rotate into inflation-friendly 'boom' trades like Banks, Small Cap Value, and Commodities, which are currently undervalued compared to growth sectors.
• 3.Major stock indices (Nasdaq and S&P 500) are accelerating rule changes to allow large IPOs to enter benchmarks as quickly as 15 trading days after offering.

Table of Contents

• The RIC Outlook
• Inflationary boom or stagflationary bust
• Coming soon to your stock index: the biggest IPOs
• RIC Roundtable on... the industrial cycle
• Dynamic Prudent Yield
• ETF Valuation
• Strategy & Thematic Highlights
• Equity Research Highlights
• Global cross-asset returns
• Appendix
• Research Analysts

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