Bank of America renowned analyst Hartnett: Record inflows into the stock market, trade worries marginalized
Bank of America Chief Investment Strategist Michael Hartnett pointed out that despite escalating trade concerns, funds have flowed into global stock markets at a record scale, indicating investors' skepticism about the economic recession triggered by U.S. tariff policies. According to data from EPFR Global, global equity funds recorded an inflow of approximately $43.4 billion within a week, marking the highest level this year. Market sentiment is beginning to reflect the impact of tariffs, but to a limited extent, as the S&P 500 index has fallen into a technical correction zone. Investors need to pay attention to the upcoming implementation of tariffs and their potential impact on the market
Amid trade concerns triggered by Trump's election, funds are pouring into global stock markets at a "monster-level" scale, as the market seems to collectively ignore the potential impacts of trade conflicts.
According to the latest report from Bank of America Chief Investment Strategist Michael Hartnett, investors generally doubt that U.S. tariff policies will lead to an economic recession, and this optimism may expose the market to greater risk adjustments in the future. Hartnett noted in a research report:
"Global investors are far from ready to short U.S. or global stocks."
This sentiment is reflected in the flow of funds: According to Bank of America citing EPFR Global data, in the week ending Wednesday, global equity funds recorded an inflow of approximately $43.4 billion, marking the highest level this year.
Market sentiment begins to reflect tariff concerns, but to a limited extent
Nevertheless, Hartnett's team observed that market sentiment is beginning to reflect the impact of the U.S. plan to implement reciprocal tariffs on April 2. For example, small business optimism in Canada has fallen to historical lows against the backdrop of impending U.S. tariff increases.
He added that compared to U.S. and international stocks, bonds and gold will be "far less" affected by tariffs.
Last week, the S&P 500 index fell into a "technical correction zone" — down 10% from its historical peak, primarily due to heightened concerns about an economic recession. If it declines again tonight, this benchmark index may record weekly declines for the fifth consecutive week.
Surprisingly, the S&P 500 index, which has fallen 3.7% this year, has underperformed European indices, such as Germany's DAX index, which has risen about 14%. The German stock market, a major exporter for the U.S., has risen since Trump's election, further illustrating that despite U.S. threats of increased tariffs, investors' concerns about global trade prospects have been significantly marginalized.
As the April 2 tariff implementation date approaches, the market will closely monitor developments in global trade relations and the potential market volatility that may arise from investors' reassessment of these risks.
Risk Warning and Disclaimer
The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk