The Flow Show The Bidterms

BofA reports a surge in bullish sentiment with the Bull & Bear Indicator hitting 7.6, as private clients reach record equity allocations of 65.7%. However, extreme concentration in semiconductors and a projected CPI over 5% by the midterms present significant risks to the current 'melt-up' base case.

Key Takeaways

• 1.The BofA Bull & Bear Indicator has risen to 7.6, approaching the 'sell signal' threshold of 8.0, driven by strong inflows to high-yield and emerging market debt.
• 2.US household equity wealth has increased by $4 trillion YTD, a 'boom loop' that is only threatened by politics or rising bond yields.
• 3.The semiconductor sector (SOX) is exhibiting bubble-like behavior, trading 62% above its 200-day moving average, a deviation exceeding the peak of the dot-com bubble.

Table of Contents

• Flows to Know
• Peak June
• 4% and there be dragons
• Prices to Know
• On Politics
• Asset Class Flows
• Fixed Income Flows
• Equity Flows
• BofA private client flows & allocations
• The Asset Class Quilt of Total Returns
• BofA Rules & Tools
• BofA Bull & Bear Indicator (B&B)
• 2026 Cross-Asset Winners & Losers

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