Michael Hartnett The Flow Show Strife Begins at Forty

The Flow Show Strife Begins at Forty

Scores on the Doors: commods 58.9%, oil 43.0%, ACWX 14.8%, SPX 13.9%, HY 2.3%, 13 August 2026 cash 2.2%, US$ 1.7%, gold 1.0%, IG -0.4%, govt bonds -1.5%, bitcoin -27.9% YTD. Investment Strategy Global Zeitgeist: “$12.5bn for Lakers why bonds can’t rally on no inflation and no jobs growth.”

The Biggest Picture: US national debt set to surpass $40tn in coming days, on course for $50tn by ’29 (Chart 2); cost of servicing debt $1.4tn in past 12 months, will keep rising until 5-year UST yields drop below 3¼% (Chart 3), reinforcing Anything But Bonds asset allocation; US stocks storming to new highs same day government selling 30-year USTs at highest yield (5.126%) in 25 years “tracks” as the kids say. Michael Hartnett Tale of the Tape: asset allocation rules of the road in 2020s remain ABB (Anything but Investment Strategist Bonds), ABC (Anywhere but China), ABD (Anything but the US Dollar), AI (all-in on AI), all BofAS bolstered in ’26 by conviction policymakers see nominal GDP boom as solution to indebtedness and view stock market as too big to fail...why Wall St trades with no fear. Anya Shelekhin Investment Strategist BofAS The Price is Right: loadsa EPS, $10tn wealth surge ’26, >$1tn AI capex ’27...door wide open for bulls to rip risk higher…only constraints are bonds (yield surge), voters (socialist surge), plus fact that all positioned for upside. Myung-Jee Jung Investment Strategist BofAS Chart 2: US national debt to surpass $40tn in coming days US total debt outstanding ($tn) Jessica Guo 50 US total debt outstanding ($tn) Jul'29 Investment Strategist $50tn* BofAS 45 Aug'26 40 $40tn* 35 Chart 1: BofA Bull & Bear Indicator 30 Down to 9.3 from Sell 9.3 Buy 10 0 10 5 Extreme Extreme Bearish Bullish 0 Source: BofA Global Investment Strategy. The indicator '66 '69 '72 '75 '78 '81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11 '14 '17 '20 '23 '26 '29 identified above as the BofA Bull & Bear Indicator is intended to be an indicative metric only and may not be Source: BofA Global Investment Strategy, Bloomberg, used for reference purposes or as a measure of *Projections based on the recent 100-day trend performance for any financial instrument or contract, or BofA GLOBAL RESEARCH otherwise relied upon by third parties for any other purpose, without the prior written consent of BofA More on page 2… Global Research. This indicator was not created to act as a benchmark. BofA GLOBAL RESEARCH

FCI = financial conditions index

Trading ideas and investment strategies discussed herein may give rise to significant risk and are LTCM = Long Term Capital not suitable for all investors. Investors should have experience in relevant markets and the financial Management resources to absorb any losses arising from applying these ideas or strategies. BofA Securities does and seeks to do business with issuers covered in its research MAGS = Roundhill Magnificent Seven reports. As a result, investors should be aware that the firm may have a conflict of ETF interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. NFP = Non-Farm Payrolls Refer to important disclosures on page 12 to 14. YCC = yield curve control

Weekly Flows: $25.4bn to cash, $23.8bn to bonds, $16.1bn to stocks, $6.3bn to gold, $0.3bn to crypto.

• Gold: $6.3bn inflow, biggest since Jan’26 (Chart 11),

• IG bonds: $10.6bn inflow, biggest in 5 weeks,

• EM debt: $1.4bn inflow, biggest in 7 weeks,

• Europe equities: $1.2bn inflow, biggest since Feb’26 (Chart 12),

• China equities: $14.5bn outflow, biggest since May’26,

• Korea equities: $2.0bn inflow, 7th week of inflows (Chart 13),

• Tech: $1.2bn outflow, biggest in 7 weeks (Chart 14),

• Materials: $2.5bn inflow, biggest since Mar’26.

BofA Private Clients: $4.7tn AUM…66.4% stocks (all time high), 17.0% bonds (lowest since Mar’22), 9.4% cash (lowest ever); within bonds private clients modestly extending duration...allocation to T-notes (2-10 year duration) up 15% YTD vs. allocation to T-bills (<1 year duration) down >30% since Nov (Chart 21– but no interest in T-bonds); in stocks, largest weekly inflow since Sep’22 (Chart 5…