According to a BofA survey, investors anticipate higher growth and inflation following Trump's victory

Global investors have revised their outlook on the global economy following Donald Trump’s election victory, now forecasting higher growth and inflation than previously anticipated, according to Bank of America's monthly fund manager survey.

In response, investors have increased their investments in U.S. stocks, particularly in small-cap stocks, which are more focused on the domestic market and stand to benefit from a robust U.S. economy.

The survey, which polled 179 participants managing $503 billion in assets, included 22% of responses after Trump’s election win. Among these, 23% of respondents indicated they expected stronger global economic growth over the next 12 months, marking the most optimistic sentiment since August 2021. This shift contrasts with the October survey, which had shown greater concern about weaker economic prospects in the coming year.

The survey also revealed a change in inflation expectations, with 10% of post-election respondents predicting higher inflation in the next year, the highest level since July 2021. In comparison, 44% of October respondents expected a decline in global CPI over the next 12 months, a figure that dropped to 16% in November.

Additionally, investors raised their exposure to U.S. equities, with a net 29% now overweight in U.S. stocks, the highest allocation since August 2013.

 

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.