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BofA's Weekly Flow Show Highlights:

CROSS ASSET
  • They write to "sell last hike" in inflationary world, "buy last hike" in disinflationary world
  • Their Bull & Bear Indicator jumps to 2.6%. from 2.0%, thereby ending the contrarian "buy signal" for risk assets. Move driven by bond and EM inflows.
  • The piece concludes that Q1 pain trade would be no landing in either the macro backdrop or stocks across January/February.
  • This could be driven by Q1 employment staying resilient while China & Europe growth improves allowing US EPS to hold firm.

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