Must Read Research
April 26, 2026
Candace Browning, Head of BofA Global Research
A few years ago, some predicted that work-from-home would bring down NYC, but today, it's the strongest housing market in the country, according to our new heat map. Meanwhile, a power source of the past is making a comeback just as humanoid robots are nearing a tipping point.
We launched the BofA Housing Heat Map.
An interactive dashboard that ranks the 50 largest U.S. homebuilder markets based on key indicators including home prices, inventory, rents, population growth, and employment/wages. The tool is designed to help investors quickly assess relative market strength and better understand regional trends with meaningful implications for homebuilder stocks. According to the composite score, the strongest MSAs (Metropolitan Statistical Area) are New York, San Francisco, and Chicago, while Greeley, Colorado, Atlanta, and Greenville, South Carolina, rank weakest. Regionally, Florida markets continue to improve both sequentially and year over year, reinforcing our Bank of America Institute's view that parts of the Sunbelt remain relatively resilient. The Heat Map also highlights a positive correlation between homebuilder ROE (Return on Equity) and builder composite scores.
About 80% of APAC's oil supply is imported, so disruptions in the Strait have prompted many countries to rely on other energy sources.
We expect a short- and long-term boost for coal–which makes up half of Asia's energy mix – driven by substitution and as capex for thermal power grows. The U.S. is seeing strength too; coal rail carloadings are up 8% this quarter on increased power demand, delayed plant closings, and exports. This fuel-efficient mode of transport is also gaining share from truckload. But there remains a secular shift away from fossil fuels, especially in Asia, that is reinforced by the conflict. Fossil fuel mix is expected to fall to 45% in China by 2030, from 59% in 2025. Uranium, energy storage, lithium, EVs, and grid construction are all expected to benefit. Battery storage in China could see a 30% CAGR (compound annual growth rate) to 2030, with EV penetration rising to 62%.
Humanoid robots are approaching commercial scale, with Head of the Greater China Auto and Industrial Research Ming Lee projecting the market to reach $224bn by 2035, with shipments growing 86% annually.
Adoption is expected to really accelerate over the next 3-4 years, supported by a rapidly improving cost structures. Hardware costs are projected to fall below $13k by 2035E, including a 45% decline from 2026 to 2030 as scale builds and component design improves. The value chain remains bifurcated. U.S. players appear better positioned in software and algorithms, particularly for general-purpose humanoids powered by proprietary embodied AI. Chinese companies are more focused on motion control and the physical robot platform, leveraging China's manufacturing ecosystem that dominates on cost, manufacturing throughput, and components. Ming notes that these dynamics underscore the importance of component suppliers.
Featuring Commentary from Global Economics Weekly
Claudio Irigoyen, Head of Global Economics, BofA Global Research
A war of attrition
The Iran war can be characterized as a dynamic game of multiple players. Even though models are only a simplification of the real world, they are sometimes useful to think about complex issues. Let's assume a game of three players: Iran, the U.S.-Israel coalition, and the markets – although there are other more passive players like China, the Gulf countries, Russia, etc.
The cost-benefit analysis
For the U.S., one could argue that the benefit of winning the war is decreasing over time, as the longer it takes to win the war and influence the energy matrix of the Middle East, the less the bargaining power vis-à-vis other countries that compete for influencing the world order. At the same time, the marginal costs are increasing and convex, as the longer the war, the higher the military and political costs.
For Iran, one could argue that the benefits are increasing over time, as the longer the war, the higher the deterrent effect on the U.S. and Israel to avoid a potential next round in the future. We would think of marginal costs as U-shaped, very high at the beginning due to the economic impact of the U.S. bombing, relatively low as the war progress as Iran can keep the Strait closed with relatively low military spending, and very high later on, as the country could run out of ammunition or food.
What markets are mispricing
Markets are assuming the end of the war depends on the U.S., as it was the case with trade wars last year. Therefore, it is optimal for markets to expect a short and contained war. But what is not priced in is a scenario where Iran manages to keep the Strait closed for longer to maximize its deterrence effect. In this case, a correction in the stock market would make the U.S. cost curve more convex.
The equilibrium of this war can be longer than what the market is pricing, because the all involved parties, including the market and other passive players, have not experienced enough pain to capitulate. As a result, this could have economic consequences that are not currently priced in.
