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Research evidence excerpt

Rotate into relative value

The RIC Outlook

The new industrial cycle rolls on

The “new industrial cycle” flagged in recent updates continues in the US as evident in

both proprietary BofA indicators and publicly available data:

• The BofA Global Wave remains positive, with nearly all Exhibit 2: BofA indicators, public data show a strong economy

components increasing over the last month; the BofA Economic indicators and levels

Industrial Momentum Indicator rose again in June; and the Name Notes

BofA Truck Shipper Survey is up 13% YoY, with the rate BofA Fluid Power Survey Demand indicators declined, NA outlook improved

indicator nearing all-time highs. BofA Global Wave Remains positive in June, 6 of 7 components up

BofA Global Earnings Revisions Global ERR improved to 1.00, up in all regions

• The latest PMI Manufacturing New Orders reading of 55.8 BofA Memory Indicator 189 April reading reached new record highs

BofA Truck Shipper Survey 63.3 +15% YoY, rate indicator near all time high points to 3.3% US GDP growth, while South Korean exports

BofA Truck Orders Heavy duty truck orders up 231% YoY, +18% MoM

up 71% YoY imply 48% global EPS growth. We discuss both BofA Industrial Momentum Indicator increased again MoM in May

in the February RIC (see Signs of a new industrial cycle). South Korea exports 71% YoY growth highest in 50 years

Manufacturing PMI 53.3 reading in expansion territory

• “Hard data” measures of economic activity reached the PMI new orders New orders PMI at 55.1, in line with 1yr MA

highest level since 2022, and “soft data” sentiment has Source: BofA Research Investment Committee, Bloomberg Note: For BofA Memory Indicator

been improving each month in 2026 (Exhibit 3). methodology see the 5 Aug 2024 Global Memory Tech report.

BofA GLOBAL RESEARCH