Trading Catalysts: Health care and CPI in focus

Research evidence excerpt

Trading Catalysts: Health care and CPI in focus

ge BofAS

BofA’s Health Care Conference kicks off in Vegas this week, and both our strategists and Arjun Goyal Equity-Linked Analyst

fundamental analysts see more opportunities in SMID (improving fundamentals, more BofAS

innovation, M&A beneficiaries) vs. large (where they lower Health Care to marketweight Nicholas Dunne

in their S&P 500 sector strategy) – see our reports: SMID HC note/ large HC note. Equity-LinkedBofAS Analyst

Convertible Bonds (CBs) also offer opportunity to participate in equity appreciation with Benjamin Bowler

bond-line downside protection (screen in the SMID HC note). Our analysts highlight 14 Equity-Linked Analyst

SMID and 5 large cap stock ideas. The BofA Desk also has a US Biotech M&A Basket of BofAS

potential takeout candidates: MLFOMORX Index. Note this is a proprietary basket See Team Page for List of Analysts

structured and maintained by the BofA Securities trading desk.

Exhibit 1: Key near-term catalysts

Record US equity ETF inflows; derivatives favor convexity SPX implied move

US equities continue to rally, driven by resilient earnings despite ongoing geopolitical

Imp.uncertainty. A key supporting factor has been record inflows into large‑cap US equity Date move Potential catalysts

ETFs (Client Flow Trends). Meanwhile, our derivs team flags extreme upside asymmetry, 5/11 Mon 0.53%

with the current move ranking among the strongest historical rallies in up/down vol 5/12 Tue 0.64% CPI

terms. They favor owning short‑dated, delta‑hedged SPX risk reversals to capture upside 5/13 Wed 0.58% PPI

gamma while monetizing downside vol premia, and structurally prefer NDX over SPX 5/14 Thu 0.64%

5/15 Fri 0.70%(delta and vol) as AI‑led momentum shows increasingly bubble‑like characteristics.