The Thundering Word

Year Ahead 2025: Go BIG in ‘25

Authored By
Analyst Name Michael Hartnett
Analyst Email michael.hartnett@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofAS
Analyst Phone +1 646 855 1508
Analyst Name Elyas Galou
Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.
Analyst Email elyas.galou@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofASE (France)
Analyst Phone +33 1 8770 0087
Analyst Name Myung-Jee Jung
Analyst Email myung-jee.jung@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofAS
Analyst Phone +1 646 855 0389
Analyst Name Anya Shelekhin
Analyst Email anya.shelekhin@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofAS
Analyst Phone +1 646 855 3753
Report Details
26 November 2024 Investment Strategy Global

The Thundering Word

Year Ahead 2025: Go BIG in ‘25

Authored By
Analyst Name Michael Hartnett
Analyst Email michael.hartnett@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofAS
Analyst Phone +1 646 855 1508
Analyst Name Elyas Galou
Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.
Analyst Email elyas.galou@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofASE (France)
Analyst Phone +33 1 8770 0087
Analyst Name Myung-Jee Jung
Analyst Email myung-jee.jung@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofAS
Analyst Phone +1 646 855 0389
Analyst Name Anya Shelekhin
Analyst Email anya.shelekhin@bofa.com
Analyst Designation Investment Strategist
Analyst Region BofAS
Analyst Phone +1 646 855 3753
Report Details
26 November 2024 Investment Strategy Global
Glossary
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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.

 

 

Key takeaways
  • Go BIG: we forecast '25 outperformance of Bonds, International stocks, Gold relative to US exceptionalism consensus
  • Playbook: US dollar & SPX overshoot in Q1...buy International Q2 on EU/Asia policy panic...long commodities on inflation...
  • ...hawkish Fed = Treasuries big buy at 5%..."bubble" risks best hedged with crypto & China stocks

The Thundering Word

2025: The Year Ahead

Booms, Busts & Tails: big policies, big moves, big tails: investment backdrop heading into '25 one of big US-RoW economic decoupling between aggressive US growth/trade policies set to exacerbate US boom/global bust (Chart 2), a Fed easing with 3% inflation, coming policy panic in EU/China, all at a time of expensive corporate bond & equity prices. 25% asset overshoots/undershoots in '25 more likely than year of mean reversion.

Go BIG in '25: our playbook: long "US boom", short "global bust" plays in Q1 = big US dollar & equity overshoot; buy International stocks in Q2 on Europe & Asia policy panic; inflation to surprise to upside…long gold & commodities; more hawkish Fed = US Treasuries big buy at 5%; "bubble" risks best hedged with crypto & China stocks; we forecast contrarian outperformance of Bonds, International stocks, Gold vs US exceptionalism consensus.

BofA in '25: BofA economists forecast global "goldilocks" (3¼% GDP growth, 2½% inflation), big budget deficits (6-7% in US), and 124 global interest rate cuts (Chart 3); BofA strategists forecast 4-4½% US Treasury yields, tight corporate bond spreads (US IG 80-100bps), global stocks up, S&P 500 at 6666, gold hitting $3000/oz.

 

Chart 1: Macro/market cycle set to shift from "recovery" in '24 to "boom" in '25

BofA Investment Clock

Chart 1: For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

Source: BofA Global Investment Strategy

BofA GLOBAL RESEARCH

 

 

The Thundering Word

 Year Ahead 2025

Big policies, big moves, big tails…investment backdrop heading into '25 one of big US-RoW economic decoupling between aggressive US growth/trade policies set to exacerbate US boom/global bust, a Fed easing with 3% inflation, coming policy panic in EU/China, all at a time of expensive corporate bond & equity prices…25% overshoots & undershoots in asset markets much more likely than a year of mean reversion.

We forecast contrarian outperformance of "BIG"…Bonds, International, Gold.

Our playbook…

  • Long "US boom," short "global bust" plays in Q1
  • Buy international stocks in Q2
  • Long gold & commodities in 2025
  • Buy 5% US Treasuries
  • Long crypto & China as "bubble" hedges
Long US Inflation Boom, short Global Deflation Bust in Q1

"US inflation boom" & "global deflation bust" likely to cause Q1 overshoot in US dollar & stocks; investors already heavily positioned for Trump trades of higher US dollar, higher US stocks, higher bond yields; we believe US small cap (Russell 2000) is the best trade to position for overshoots (e.g. Euro breaking parity, S&P 500 bull that began at 666 in '09 melts up to 6666) on inflationary combination of US tariffs, immigration controls, deregulation, tax cuts; in contrast, Europe, Asia & Emerging Markets enter 2025 with notably weak economic momentum, particularly in manufacturing (PMIs 45-50), and that's before any trade war; banks/financials have been best-performing '24 equity sector in Europe, Japan, China, and now most vulnerable/best short opportunity into Q1 as investors forced to fully price "global deflation bust"; note EM FX at multi-decade lows approaching "credit event" territory (BofA forecasts further 5% depreciation in Q1), at a time when few are anticipating credit events.

Long International in Q2

By spring, we predict a combo of Fed turning hawkish (Wall St inflation, Main St boom) and "policy panic" in Europe & Asia; "US exceptionalism" peaks in Q2 signalling a. major correction in US stocks (strong US$ + weak world = no bueno when 30% of S&P 500 revenues come from overseas) and b. asset allocation into cheap international stocks & currencies lured by more China fiscal easing, new European fiscal easing (German election/Russia-Ukraine peace), aggressive ECB rate cuts, all in anticipation of "America First" tariffs; combo of lower rates, cheaper currencies, lower oil price = huge Q2 easing of financial conditions in Asia & Europe relative to US, supports rotation into European cyclicals, EM currencies.

Long Commodities in 2025

 Secular inflation themes of fiscal excess, economic isolationism, AI (spending before productivity) to continue to overwhelm any disinflation from deregulation & ending-wars in '25; would be political malpractice for Trump administration to allow 2nd wave of inflation, but booms = higher not lower inflation, and US starts 2025 with full employment and an administration that believes: a. best way to reduce US budget deficit of 6-7% of GDP ($2tn) is via very strong GDP-maximizing tax revenues, and b. best way to boost corporate & household "animal spirits" is via asset price inflation; BofA Investment Clock says that '24 equity-bullish "recovery" phase of lower rates and higher EPS will likely be followed by '25 commodity-bullish "boom" phase of higher EPS and higher rates; "bear steepening" of yield curve in Q1 to signal transition as bonds price in "inflation boom" and price out rate "cuts" (Chart 1); we believe gold (buy on any weakness <$2500/oz), crypto & the unloved asset class of commodities outperform in '25 as inflation surprises to upside, best played via copper, materials, LatAm, commodity currencies once "policy panic" visible in Asia & Europe.

Buy 5% US Treasuries

The history of equity performance after rare event of two consecutive 20%+ gains in S&P 500 shows big decline in yields in '25 needed to prevent big equity reversal (see 1929/30, 1937/38, 1956/57), and catalyze further big gains (as was seen in 1997/98 - Table 1); 'long bonds' understandingly unloved heading into new year (82% of investors predict a steeper yield curve & just 8% expect an economic hard landing); we think bonds big opportunity in 2025, would be big buyer of US Treasury yield overshoot to 5%, a level that would induce a. volatility & risk asset losses, b. peak "inflation boom," c. innovative solutions to reduce US budget deficit (e.g. new Government Sponsored Enterprise to boost US home equity lending, increase tax revenues, reduce interest payments - Chart 4); disorderly rise in bond yields biggest threat to stocks but we believe Treasuries more likely to end-25 <4% than >5%...allowing H1 global equity volatility to morph into 5-10% gains in global equities by end-year.

Long Crypto/China = best "bubble" hedges

investors must hedge for unanticipated "tail risks" e.g. end of HK currency peg, 'America First' policies inducing Euro break-up or EU pivot to East, Trump tariffs causing snap US contraction, 2nd wave of inflation forcing Fed hikes, US dollar debasement on new inflationary Fed Chair in 2026, classic Wall St bubble in AI, and so on; we believe a AI/Magnificent 7 "bubble" most obvious "tail" (Chart 5) as many investors anticipate capitulation from $7tn of money market funds (Chart 6) into US stocks (and if tighter Q1 financial conditions fail to restrain animal spirits, you know it's 1999); we believe long crypto and China stocks (distressed value/tech-exposure) best plays in a Magnificent 7 bubble.

Chart 2: US boom vs global bust…US stocks at 75-year high vs RoW

US vs Global equities (US$ terms)

Chart 2: For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

Source: BofA Global Investment Strategy, Bloomberg.

BofA GLOBAL RESEARCH

 

 

Chart 3: BofA forecasting 124 rate cuts by central banks in '25

Global policy rate cuts

Chart 3: For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

Source: BofA Global Research, Bloomberg.

*based on BofA Economics projections for 2024 and 2025.

BofA GLOBAL RESEARCH

 

 

Table 1: Happy bonds = happy stocks in 2025

Returns in years following S&P 500 up >20% for 2 years in a row

For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

S&P 500 up >20%

 

S&P 500 returns

 

Treasury returns

for 2 years in a row

 

in following 2 years

 

in following 2 years

 

 

 

 

 

 

 

 

1927

1928

→

1929

1930

 

1929

1930

31%

38%

 

-12%

-28%

 

4%

5%

 

 

 

 

 

 

 

 

1935

1936

→

1937

1938

 

1937

1938

42%

28%

 

-39%

25%

 

1%

4%

 

 

 

 

 

 

 

 

1954

1955

→

1956

1957

 

1956

1957

45%

26%

 

3%

-14%

 

-3%

6%

 

 

 

 

 

 

 

 

1995

1996

→

1997

1998

 

1997

1998

34%

20%

 

31%

27%

 

12%

14%

 

 

 

 

 

 

 

 

2023

2024

→

2025

2026

 

2025

2026

24%

24%

 

-

-

 

-

-

Source: BofA Global Investment Strategy, GFD Fineaon, Bloomberg

BofA GLOBAL RESEARCH

 

 

Chart 4: Buy Bonds…US needs innovative solutions to reduce $36tn debt

US residential home equity ($tn) & US national debt ($tn)

Chart 4: For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

Source: BofA Global Investment Strategy, GFD Finaeon, Bloomberg

 

BofA GLOBAL RESEARCH

 

 

Chart 5: "Magnificent 7" Bubble

Asset 'bubbles' in the past 50 years

Chart 5: For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

Source: BofA Global Investment Strategy, Bloomberg

BofA GLOBAL RESEARCH

 

 

Chart 6: Cash Bubble

Money market fund AUM ($tn)

Chart 6: For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

Source: BofA Global Research, Bloomberg

BofA GLOBAL RESEARCH

 

 

  BofA on Macro & Markets in 2025

BofA economists and strategists forecast "goldilocks" for the global economy in '25 (3¼% GDP growth, 2½% inflation), another year of monetary easing & big budget deficits, a weaker US dollar (down 2-3% by end-25), a big drop in oil prices (-20%), gold prices hitting $3000/oz (Table 2).

  • On macro: BofA forecasts "soft landing" in both the US (2½% GDP growth) and China (4½%), modest acceleration in Europe & Japan (GDP growth 1-1½%); global inflation rates are forecast to fall, though US core CPI expected to rise above 3%;
  • On policy: BofA forecasts 124 rate cuts by central banks (Chart 3) taking the global policy rate from 5% to 4%; the Fed predicted to cut rates 2 more times in H1'25 and then end its easing cycle in Jun'25; fiscal policies set to ease (German deficit to 3% GDP) or stay accommodative (US deficit 6-7% of GDP);
  • On bonds: BofA forecasts range-bound government bond yields (e.g. US Treasuries 4-4 ½%), range-bound corporate bond spreads (US IG bonds 80-100bps), and wider Emerging Market bond spreads (widening by up to 100bps);
  • On stocks: BofA forecasts the S&P500 to end '25 at 6666, gains of 5-10% for global stocks, rotation from US to International markets in Q2;
  • On currencies: BofA forecasts peak in US dollar in Q1; US$ to remain strong vs. Asian currencies (end-year forecast for Japanese yen is 160, for Chinese renminbi 7.4), but Euro to appreciate to 1.15 by year-end;
  •  On commodities: BofA expects commodity prices to ultimately rise in 2025; base & precious metal prices forecast to jump (copper up 17%, gold to $3000/oz); but oil prices to buck trend (Brent to average $65/bbl, down 20% from '24).

Table 2: BofA Macro & Market Forecasts for 2024 and 2025

BofA Global Research forecasts

For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

 

2024F

2025F

Economy

 

 

Global real GDP (%)

3.1%

3.3%

US real GDP (%)

2.7%

2.4%

Euro area real GDP (%)

0.7%

1.1%

China real GDP (%)

4.8%

4.5%

Japan real GDP (%)

0.0%

1.3%

Global CPI (%)

3.1%

2.6%

US CPI (%)

2.9%

2.4%

US core CPI (%)

3.4%

3.0%

US unemployment rate (%)

4.0%

4.3%

Interest rates

 

 

Fed Funds*

4.25%-4.50%

3.75%-4.0%

ECB refi rate*

3.00%

1.50%

BoJ policy rate*

0.25%

0.75%

UST 2-year Treasury*

4.30%

4.00%

UST 10-year Treasury*

4.40%

4.25%

Currencies

 

 

EUR-USD*

1.05

1.10

USD-JPY*

151

160

USD-CNY*

7.30

7.40

Equities

 

 

S&P500*

6000

6666

Commodities

 

 

Gold, $/ounce*

2700

3,000

Oil (Brent) $/barrel

80

65

Copper, $/t*

9500

10500

Source: BofA Global Research; note all macro forecasts are annual averages, except otherwise noted.

*BofA forecasts for interest rates, FX rates, equities, and metals are year-end targets.

BofA GLOBAL RESEARCH

 2024 in 4 Themes

ABP "Anything but Populism": 40% of world's population went to the polls in '24; in anticipation policy makers eased fiscal, monetary, energy policies to maintain full employment and in hopes of maintaining political status quo; "ABP" easing sent Bitcoin (up 161% annualized - Table 3) & gold (35% - Table 3) to all-time highs, but failed politically as electorates angered by inflation & inequality punished incumbent parties (80% lost), and voted for populists, culminating with big Trump victory in US; in '25 we say Trump 2.0 = US inflationary boom = bid for crypto & gold continues;

ABB "Anything but Bonds": inflation fell, central banks cut rates 153 times; shift from "easy fiscal-tight money" in '23 to "easy fiscal-easy money" in '24…risk assets soared (stocks +20%); strong US growth = no global recession; bond yields range-bound as low inflation & rate cuts offset by rise in US government debt ($36tn, +$1tn in 100 days) & deficits (7% of GDP)…investors had no excuse to abandon their 2020s "Anything but Bonds" stance (govt bonds fell 4% - Table 3), rotate from stocks & credit; in '25 we are buyers of Treasuries above 5%...triggers asset losses/growth slowdown;

AI "Artificial Intelligence": can't buy bonds, can't buy "leverage" or "duration" (e.g. small cap, China, biotech); liquidity poured into high quality assets e.g. companies with strong monopolistic positions, particularly those in US driving/benefiting from AI "arms race"; SPX trailing P/E now 26.5x (4th highest in past 125 years), US stocks at 75-year high vs. RoW (Chart 2), record US index concentration (top 10 stocks = 37% of S&P 500 market cap), market cap of the "Magnificent 7" stocks up $4tn in 2024; US secular AI winner, but we expect Q1 "US exceptionalism" to peak / allocation to International to trough, as US financial conditions tighten, and Asia & Europe forced to ease big.

ABC "Anywhere but China": investors in '24 remained resolutely negative on China, reduced portfolio sensitivity to Chinese economy plagued by real estate deflation, weak consumption, geopolitics; China stocks fell to 51-year lows vs US, China bonds to all-time highs vs Treasuries; but ABC trade reversed in H2'24 as Chinese policymakers began surprise easing…China stocks rallied big while equity beneficiaries of "ABC" (Japan, Mexico, India) notably peaked in H2'24, and China real estate & macro data improved; we say China outperforms '25…China unloved but notably China tech (26% YTD) has been pacing US tech gains (34% YTD) in '24, after big underperformance since 2022.

Table 3: 2024 YTD ranked returns

Year-to-date ranked cross asset returns

For an accessible version Merrill clients call 800-637-7455; Merrill Edge Self-Directed clients call 877-653-4732

 Ranked Returns, USD-terms (2024)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

Equities

 

Sectors

 

Fixed Income

 

FX vs. USD

 

Commodities

1

Gold

30.9%

1

Taiwan Equities

33.5%

1

ACWI Info Tech

29.5%

1

CCC HY

17.6%

1

Bitcoin

137.1%

1

Gold

30.9%

2

US Equities

27.1%

2

Singapore Equities

33.4%

2

ACWI Telecoms

25.2%

2

US Corp HY

8.2%

2

South African rand

1.4%

2

Silver

30.1%

3

Pacific Rim xJapan

10.1%

3

US Equities

27.1%

3

ACWI Financials

24.8%

3

EM Corporate

6.3%

3

Indian rupee

-1.5%

3

Natural Gas

24.5%

4

EM Equities

9.0%

4

Canada Equities

18.7%

4

ACWI Banks

22.3%

4

EM Sovereign

4.9%

4

British pound

-1.6%

4

Commodities

4.7%

5

UK Equities

8.7%

5

China Equities

15.7%

5

ACWI Industrials

16.4%

5

3-Month Treasury Bills

4.7%

5

Chinese renminbi

-2.0%

5

Copper

4.7%

6

High Yield Bonds

7.5%

6

India Equities

14.0%

6

ACWI Utilities

14.9%

6

2-year Treasury

3.1%

6

Australian dollar

-4.6%

6

WTI Crude Oil

-0.6%

7

Industrial Metals

6.3%

7

Germany Equities

9.3%

7

ACWI Cons. Discretionary

14.6%

7

US Corp IG

3.1%

7

Canadian dollar

-5.3%

7

Platinum

-2.0%

8

Japan Equities

6.3%

8

Australia Equities

9.3%

8

ACWI Energy

8.2%

8

TIPS

2.7%

8

Euro

-5.6%

8

Brent Crude Oil

-2.4%

9

US Dollar

6.1%

9

UK Equities

8.7%

9

ACWI Real Estate

5.7%

9

US Mortgage Master

1.7%

9

Taiwanese dollar

-5.8%

 

 

 

10

EM Sovereign Bonds

4.9%

10

Japan Equities

6.3%

10

ACWI Consumer Staples

5.0%

10

European HY

1.6%

10

Swiss franc

-5.9%

 

 

 

11

Europe Equities

3.1%

11

Switzerland Equities

1.2%

11

ACWI Healthcare

3.9%

11

Treasury Master

0.8%

11

NZ dollar

-7.7%

 

 

 

12

IG Bonds

1.6%

12

Hong Kong Equities

-0.8%

12

ACWI BioTechnology

1.1%

12

UK Govt

-4.4%

12

Korean won

-8.4%

 

 

 

13

Oil

-0.6%

13

France Equities

-5.9%

13

ACWI Materials

-2.5%

13

30-year Treasury

-5.6%

13

Japanese yen

-8.9%

 

 

 

 

 

 

14

Brazil Equities

-18.4%

 

 

 

15

Japan Govt

-12.0%

14

Mexican peso

-17.0%

 

 

 

 

 

 

15

Mexico Equities

-24.8%

 

 

 

 

 

 

 

 

 

 

 

 

Source: BofA Global Investment Strategy, Bloomberg. As of 22nd November

BofA GLOBAL RESEARCH

 

 

 Important Disclosures

 

FUNDAMENTAL EQUITY OPINION KEY: Opinions include a Volatility Risk Rating, an Investment Rating and an Income Rating. VOLATILITY RISK RATINGS, indicators of potential price fluctuation, are: A - Low, B - Medium and C - High. INVESTMENT RATINGS reflect the analyst's assessment of both a stock's absolute total return potential as well as its attractiveness for investment relative to other stocks within its Coverage Cluster (defined below). Our investment ratings are: 1 - Buy stocks are expected to have a total return of at least 10% and are the most attractive stocks in the coverage cluster; 2 - Neutral stocks are expected to remain flat or increase in value and are less attractive than Buy rated stocks and 3 - Underperform stocks are the least attractive stocks in a coverage cluster. An investment rating of 6 (No Rating) indicates that a stock is no longer trading on the basis of fundamentals. Analysts assign investment ratings considering, among other things, the 0-12 month total return expectation for a stock and the firm's guidelines for ratings dispersions (shown in the table below). The current price objective for a stock should be referenced to better understand the total return expectation at any given time. The price objective reflects the analyst's view of the potential price appreciation (depreciation).

Investment rating

Total return expectation (within 12-month period of date of initial rating)

Ratings dispersion guidelines for coverage clusterR1

Buy

≥ 10%

≤ 70%

Neutral

≥ 0%

≤ 30%

Underperform

N/A

≥ 20%

 R1Ratings dispersions may vary from time to time where BofA Global Research believes it better reflects the investment prospects of stocks in a Coverage Cluster.

INCOME RATINGS, indicators of potential cash dividends, are: 7 - same/higher (dividend considered to be secure), 8 - same/lower (dividend not considered to be secure) and 9 - pays no cash dividend. Coverage Cluster is comprised of stocks covered by a single analyst or two or more analysts sharing a common industry, sector, region or other classification(s). A stock's coverage cluster is included in the most recent BofA Global Research report referencing the stock. 

 

Due to the nature of strategic analysis, the issuers or securities recommended or discussed in this report are not continuously followed. Accordingly, investors must regard this report as providing stand-alone analysis and should not expect continuing analysis or additional reports relating to such issuers and/or securities.

BofA Global Research personnel (including the analyst(s) responsible for this report) receive compensation based upon, among other factors, the overall profitability of Bank of America Corporation, including profits derived from investment banking. The analyst(s) responsible for this report may also receive compensation based upon, among other factors, the overall profitability of the Bank's sales and trading businesses relating to the class of securities or financial instruments for which such analyst is responsible.

BofA Securities fixed income analysts regularly interact with sales and trading desk personnel in connection with their research, including to ascertain pricing and liquidity in the fixed income markets.

 

Other Important Disclosures

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"BofA Securities" includes BofA Securities, Inc. ("BofAS") and its affiliates. Investors should contact their BofA Securities representative or Merrill Global Wealth Management financial advisor if they have questions concerning this report or concerning the appropriateness of any investment idea described herein for such investor. "BofA Securities" is a global brand for BofA Global Research.

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​​BofAS and/or Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") may in the future distribute, information of the following non-US affiliates in the US (short name: legal name, regulator): Merrill Lynch (South Africa): Merrill Lynch South Africa (Pty) Ltd., regulated by The Financial Service Board; MLI (UK): Merrill Lynch International, regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA); BofASE (France): BofA Securities Europe SA is authorized by the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and regulated by the ACPR and the Autorité des Marchés Financiers (AMF). BofA Securities Europe SA ("BofASE") with registered address at 51, rue La Boétie, 75008 Paris is registered under no 842 602 690 RCS Paris. In accordance with the provisions of French Code Monétaire et Financier (Monetary and Financial Code), BofASE is an établissement de crédit et d'investissement (credit and investment institution) that is authorised and supervised by the European Central Bank and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and regulated by the ACPR and the Autorité des Marchés Financiers. BofASE's share capital can be found at www.bofaml.com/BofASEdisclaimer; BofA Europe (Milan): Bank of America Europe Designated Activity Company, Milan Branch, regulated by the Bank of Italy, the European Central Bank (ECB) and the Central Bank of Ireland (CBI); BofA Europe (Frankfurt): Bank of America Europe Designated Activity Company, Frankfurt Branch regulated by BaFin, the ECB and the CBI; BofA Europe (Madrid): Bank of America Europe Designated Activity Company, Sucursal en España, regulated by the Bank of Spain, the ECB and the CBI; Merrill Lynch (Australia): Merrill Lynch Equities (Australia) Limited, regulated by the Australian Securities and Investments Commission; Merrill Lynch (Hong Kong): Merrill Lynch (Asia Pacific) Limited, regulated by the Hong Kong Securities and Futures Commission (HKSFC); Merrill Lynch (Singapore): Merrill Lynch (Singapore) Pte Ltd, regulated by the Monetary Authority of Singapore (MAS); Merrill Lynch (Canada): Merrill Lynch Canada Inc, regulated by the Canadian Investment Regulatory Organization; Merrill Lynch (Mexico): Merrill Lynch Mexico, SA de CV, Casa de Bolsa, regulated by the Comisión Nacional Bancaria y de Valores; BofAS Japan: BofA Securities Japan Co., Ltd., regulated by the Financial Services Agency; Merrill Lynch (Seoul): Merrill Lynch International, LLC Seoul Branch, regulated by the Financial Supervisory Service; Merrill Lynch (Taiwan): Merrill Lynch Securities (Taiwan) Ltd., regulated by the Securities and Futures Bureau; BofAS India: BofA Securities India Limited, regulated by the Securities and Exchange Board of India (SEBI); Merrill Lynch (Israel): Merrill Lynch Israel Limited, regulated by Israel Securities Authority; Merrill Lynch (DIFC): Merrill Lynch International (DIFC Branch), regulated by the Dubai Financial Services Authority (DFSA); Merrill Lynch (Brazil): Merrill Lynch S.A. Corretora de Títulos e Valores Mobiliários, regulated by Comissão de Valores Mobiliários; Merrill Lynch KSA Company: Merrill Lynch Kingdom of Saudi Arabia Company, regulated by the Capital Market Authority.​

This information: has been approved for publication and is distributed in the United Kingdom (UK) to professional clients and eligible counterparties (as each is defined in the rules of the FCA and the PRA) by MLI (UK), which is authorized by the PRA and regulated by the FCA and the PRA - details about the extent of our regulation by the FCA and PRA are available from us on request; has been approved for publication and is distributed in the European Economic Area (EEA) by BofASE (France), which is authorized by the ACPR and regulated by the ACPR and the AMF; has been considered and distributed in Japan by BofAS Japan, a registered securities dealer under the Financial Instruments and Exchange Act in Japan, or its permitted affiliates; is issued and distributed in Hong Kong by Merrill Lynch (Hong Kong) which is regulated by HKSFC; is issued and distributed in Taiwan by Merrill Lynch (Taiwan); is issued and distributed in India by BofAS India; and is issued and distributed in Singapore to institutional investors and/or accredited investors (each as defined under the Financial Advisers Regulations) by Merrill Lynch (Singapore) (Company Registration No 198602883D). Merrill Lynch (Singapore) is regulated by MAS. Merrill Lynch Equities (Australia) Limited (ABN 65 006 276 795), AFS License 235132 (MLEA) distributes this information in Australia only to 'Wholesale' clients as defined by s.761G of the Corporations Act 2001. With the exception of Bank of America N.A., Australia Branch, neither MLEA nor any of its affiliates involved in preparing this information is an Authorised Deposit-Taking Institution under the Banking Act 1959 nor regulated by the Australian Prudential Regulation Authority. No approval is required for publication or distribution of this information in Brazil and its local distribution is by Merrill Lynch (Brazil) in accordance with applicable regulations. Merrill Lynch (DIFC) is authorized and regulated by the DFSA. Information prepared and issued by Merrill Lynch (DIFC) is done so in accordance with the requirements of the DFSA conduct of business rules. BofA Europe (Frankfurt) distributes this information in Germany and is regulated by BaFin, the ECB and the CBI. BofA Securities entities, including BofA Europe and BofASE (France), may outsource/delegate the marketing and/or provision of certain research services or aspects of research services to other branches or members of the BofA Securities group. You may be contacted by a different BofA Securities entity acting for and on behalf of your service provider where permitted by applicable law. This does not change your service provider. Please refer to the Electronic Communications Disclaimers for further information.

​This information has been prepared and issued by BofAS and/or one or more of its non-US affiliates. The author(s) of this information may not be licensed to carry on regulated activities in your jurisdiction and, if not licensed, do not hold themselves out as being able to do so. BofAS and/or MLPF&S is the distributor of this information in the US and accepts full responsibility for information distributed to BofAS and/or MLPF&S clients in the US by its non-US affiliates. Any US person receiving this information and wishing to effect any transaction in any security discussed herein should do so through BofAS and/or MLPF&S and not such foreign affiliates. Hong Kong recipients of this information should contact Merrill Lynch (Asia Pacific) Limited in respect of any matters relating to dealing in securities or provision of specific advice on securities or any other matters arising from, or in connection with, this information. Singapore recipients of this information should contact Merrill Lynch (Singapore) Pte Ltd in respect of any matters arising from, or in connection with, this information. For clients that are not accredited investors, expert investors or institutional investors Merrill Lynch (Singapore) Pte Ltd accepts full responsibility for the contents of this information distributed to such clients in Singapore.

General Investment Related Disclosures:

Taiwan Readers: Neither the information nor any opinion expressed herein constitutes an offer or a solicitation of an offer to transact in any securities or other financial instrument. No part of this report may be used or reproduced or quoted in any manner whatsoever in Taiwan by the press or any other person without the express written consent of BofA Securities.

This document provides general information only, and has been prepared for, and is intended for general distribution to, BofA Securities clients. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other financial instrument or any derivative related to such securities or instruments (e.g., options, futures, warrants, and contracts for differences). This document is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of, and is not directed to, any specific person(s). This document and its content do not constitute, and should not be considered to constitute, investment advice for purposes of ERISA, the US tax code, the Investment Advisers Act or otherwise. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may not be realized. Any decision to purchase or subscribe for securities in any offering must be based solely on existing public information on such security or the information in the prospectus or other offering document issued in connection with such offering, and not on this document.

Securities and other financial instruments referred to herein, or recommended, offered or sold by BofA Securities, are not insured by the Federal Deposit Insurance Corporation and are not deposits or other obligations of any insured depository institution (including, Bank of America, N.A.). Investments in general and, derivatives, in particular, involve numerous risks, including, among others, market risk, counterparty default risk and liquidity risk. No security, financial instrument or derivative is suitable for all investors. Digital assets are extremely speculative, volatile and are largely unregulated. In some cases, securities and other financial instruments may be difficult to value or sell and reliable information about the value or risks related to the security or financial instrument may be difficult to obtain. Investors should note that income from such securities and other financial instruments, if any, may fluctuate and that price or value of such securities and instruments may rise or fall and, in some cases, investors may lose their entire principal investment. Past performance is not necessarily a guide to future performance. Levels and basis for taxation may change.

BofA Securities is aware that the implementation of the ideas expressed in this report may depend upon an investor's ability to "short" securities or other financial instruments and that such action may be limited by regulations prohibiting or restricting "shortselling" in many jurisdictions. Investors are urged to seek advice regarding the applicability of such regulations prior to executing any short idea contained in this report.

This report may contain a trading idea or recommendation which highlights a specific identified near-term catalyst or event impacting a security, issuer, industry sector or the market generally that presents a transaction opportunity, but does not have any impact on the analyst's particular "Overweight" or "Underweight" rating (which is based on a three month trade horizon). Trading ideas and recommendations may differ directionally from the analyst's rating on a security or issuer because they reflect the impact of a near-term catalyst or event.

Foreign currency rates of exchange may adversely affect the value, price or income of any security or financial instrument mentioned in this report. Investors in such securities and instruments effectively assume currency risk.

BofAS or one of its affiliates is a regular issuer of traded financial instruments linked to securities that may have been recommended in this report. BofAS or one of its affiliates may, at any time, hold a trading position (long or short) in the securities and financial instruments discussed in this report.

BofA Securities, through business units other than BofA Global Research, may have issued and may in the future issue trading ideas or recommendations that are inconsistent with, and reach different conclusions from, the information presented herein. Such ideas or recommendations may reflect different time frames, assumptions, views and analytical methods of the persons who prepared them, and BofA Securities is under no obligation to ensure that such other trading ideas or recommendations are brought to the attention of any recipient of this information.

In the event that the recipient received this information pursuant to a contract between the recipient and BofAS for the provision of research services for a separate fee, and in connection therewith BofAS may be deemed to be acting as an investment adviser, such status relates, if at all, solely to the person with whom BofAS has contracted directly and does not extend beyond the delivery of this report (unless otherwise agreed specifically in writing by BofAS). If such recipient uses the services of BofAS in connection with the sale or purchase of a security referred to herein, BofAS may act as principal for its own account or as agent for another person. BofAS is and continues to act solely as a broker-dealer in connection with the execution of any transactions, including transactions in any securities referred to herein.

Copyright and General Information:

​Copyright 2024 Bank of America Corporation. All rights reserved. iQdatabase® is a registered service mark of Bank of America Corporation. This information is prepared for the use of BofA Securities clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of BofA Securities. This document and its content is provided solely for informational purposes and cannot be used for training or developing artificial intelligence (AI) models or as an input in any AI application (collectively, an AI tool). Any attempt to utilize this document or any of its content in connection with an AI tool without explicit written permission from BofA Global Research is strictly prohibited. BofA Global Research information is distributed simultaneously to internal and client websites and other portals by BofA Securities and is not publicly-available material. Any unauthorized use or disclosure is prohibited. Receipt and review of this information constitutes your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained herein (including any investment recommendations, estimates or price targets) without first obtaining express permission from an authorized officer of BofA Securities.

Materials prepared by BofA Global Research personnel are based on public information. Facts and views presented in this material have not been reviewed by, and may not reflect information known to, professionals in other business areas of BofA Securities, including investment banking personnel. BofA Securities has established information barriers between BofA Global Research and certain business groups. As a result, BofA Securities does not disclose certain client relationships with, or compensation received from, such issuers. To the extent this material discusses any legal proceeding or issues, it has not been prepared as nor is it intended to express any legal conclusion, opinion or advice. Investors should consult their own legal advisers as to issues of law relating to the subject matter of this material. BofA Global Research personnel's knowledge of legal proceedings in which any BofA Securities entity and/or its directors, officers and employees may be plaintiffs, defendants, co-defendants or co-plaintiffs with or involving issuers mentioned in this material is based on public information. Facts and views presented in this material that relate to any such proceedings have not been reviewed by, discussed with, and may not reflect information known to, professionals in other business areas of BofA Securities in connection with the legal proceedings or matters relevant to such proceedings.

This information has been prepared independently of any issuer of securities mentioned herein and not in connection with any proposed offering of securities or as agent of any issuer of any securities. None of BofAS any of its affiliates or their research analysts has any authority whatsoever to make any representation or warranty on behalf of the issuer(s). BofA Global Research policy prohibits research personnel from disclosing a recommendation, investment rating, or investment thesis for review by an issuer prior to the publication of a research report containing such rating, recommendation or investment thesis.

Any information relating to sustainability in this material is limited as discussed herein and is not intended to provide a comprehensive view on any sustainability claim with respect to any issuer or security.

Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent tax professional.

The information herein (other than disclosure information relating to BofA Securities and its affiliates) was obtained from various sources and we do not guarantee its accuracy. This information may contain links to third-party websites. BofA Securities is not responsible for the content of any third-party website or any linked content contained in a third-party website. Content contained on such third-party websites is not part of this information and is not incorporated by reference. The inclusion of a link does not imply any endorsement by or any affiliation with BofA Securities. Access to any third-party website is at your own risk, and you should always review the terms and privacy policies at third-party websites before submitting any personal information to them. BofA Securities is not responsible for such terms and privacy policies and expressly disclaims any liability for them.

All opinions, projections and estimates constitute the judgment of the author as of the date of publication and are subject to change without notice. Prices also are subject to change without notice. BofA Securities is under no obligation to update this information and BofA Securities ability to publish information on the subject issuer(s) in the future is subject to applicable quiet periods. You should therefore assume that BofA Securities will not update any fact, circumstance or opinion contained herein.

Certain outstanding reports or investment opinions relating to securities, financial instruments and/or issuers may no longer be current. Always refer to the most recent research report relating to an issuer prior to making an investment decision.

In some cases, an issuer may be classified as Restricted or may be Under Review or Extended Review. In each case, investors should consider any investment opinion relating to such issuer (or its security and/or financial instruments) to be suspended or withdrawn and should not rely on the analyses and investment opinion(s) pertaining to such issuer (or its securities and/or financial instruments) nor should the analyses or opinion(s) be considered a solicitation of any kind. Sales persons and financial advisors affiliated with BofAS or any of its affiliates may not solicit purchases of securities or financial instruments that are Restricted or Under Review and may only solicit securities under Extended Review in accordance with firm policies.

Neither BofA Securities nor any officer or employee of BofA Securities accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this information.

 

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