the flow show-US Exceptionalism to US Repudiation

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 analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 9 to 11. 12816311 The Flow Show US Exceptionalism to US Repudiation Scores on the Doors: gold 19.5%, govt bonds 4.3%, IG 2.4%, cash 1.2%, HY 0.2%, commodities -5.5%, stocks -6.2%, US dollar -7.0%, oil -16.1%, crypto -38.8% YTD. Zeitgeist: “I wouldn’t want to be a waiter in Boca Raton tonight,” retired investor on US muni bond meltdown. Zeitgeist: "Musk owned the long-end in Q1, but now the long-end owns Trump.” The Biggest Picture: “US exceptionalism” ending, “US repudiation” starting; end of era of “US buys RoW goods-RoW buys US Treasuries”…buyers’ strike of US assets; foreigners own 33% ($8.5tn) of US Treasuries (Chart 2), 27% ($4.4tn) US corp bonds, 18% ($16.5tn) of US stocks…why US dollar in secular bear market, US yield curve set to steepen, old S&P 500 valuation “floor” of 20x is now the new “ceiling” (Chart 3). Long 2s, short Spoos: “higher US yields, lower stocks, lower US$” driving global asset liquidation, will likely force policymakers to act; but we “sell-the-rips,” long 2-year Treasuries, short S&P until a. Fed cuts hard to break liquidation cycle, b. Trump-Xi pause trade war to reverse global recession momentum; we still think SPX at 4.8k is the right level to buy risk assets if policy panic makes recession short/shallow. Chart 2: Foreigners own 33% of US Treasury market US Treasury ownership since 1945 Source: BofA Global Investment Strategy, Flow of Funds, Haver BofA GLOBAL RESEARCH More on page 2… Government24%Financial sector31%Pension funds2%Rest of World33%Households11%0%10%20%30%40%50%60%70%80%90%100%194519551965197519851995200520152025GovernmentFinancial sectorPension fundsRest of WorldHouseholds10 April 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 +1 646 855 3753 anya.shelekhin@bofa.com Myung-Jee Jung Invest