Warsh’s first press, retail sales, and a ceasefire headline

Research evidence excerpt

Warsh’s first press, retail sales, and a ceasefire headline

t are priced in, the greater BofAS

the risk to small caps – see SMID Theme Screens for stocks with most/least refin risk. Derivatives Strategy

Nitin Saksena

Too early for Tech, time for Value Equity-LinkedBofAS Analyst

Savita Subramanian highlights that sectors have grown increasingly correlated, but Arjun Goyal

grouping stocks based on capital allocation peer groups (dvds, buybacks, capex, R&D) Equity-Linked Analyst BofAS

have exhibited stable and high alpha opportunity. These capital allocation baskets say

Nicholas Dunne

that it’s too early to buy beaten-down Tech – which is currently underrepresented in the Equity-Linked Analyst

top quintile of the best performing factors historically, and skewed toward the bottom BofAS

quintile (worst-performing factors) within both the CapEx and R&D groups (see Quant Benjamin Bowler

Equity-Linked Analyst

Profiles). Energy screens best – consistent with the team’s Momentum & Value sector BofAS

framework (see Rel Value Cheat Sheet). Desk Basket ideas: BofA US Long Value See Team Page for List of Analysts

(MLUPVALUL Index). Note: MLUPVALUL is a proprietary basket structured and

maintained by the BofA Securities trading desk.

Exhibit 1: Key near-term catalysts

High BRI tech momentum pulls back acutely on rising rates SPX implied move

Like last week, a hawkish set of prints could act as the catalyst for a sharp unwind in Imp.

crowded, high-BRI names (Exhibit 3). The early-June selloff showed how quickly fragility Date move Potential catalysts

can surface when rates reprice, with high-momentum Tech bearing the brunt. The right 6/15 Mon 0.88%

6/16 Tue 0.72%

tail & further expansion of the AI bubble remains the pain trade, as exemplified by the 6/17 Wed 0.84% FOMC