Bank of America’s latest survey reveals that investors are shifting their focus to European stocks as they prepare for a potential shift in US President Donald Trump’s stance on global trade. The poll, which monitors the investment strategies of fund managers, shows a significant increase in allocation to European markets this month.
Meanwhile, expectations for inflation remain high at 2022 levels, suggesting that investors are taking a wait-and-see approach as they await announcements from the Trump administration on tariffs and immigration cuts. Despite this, the survey suggests that there is growing optimism among investors about the potential for US equity laggards to rally in response to a softer-than-feared stance by President Trump.
The data indicates a sharp rotation away from US stocks and into European markets, which could be a sign of investors’ confidence in the region’s economic prospects. As such, European stocks are likely to benefit from the growing optimism among fund managers, who see an opportunity for growth in the face of uncertainty about global trade policies.
Source: https://www.bloomberg.com/news/articles/2025-01-21/bofa-says-benign-trump-policies-to-spark-rally-in-stock-laggards