BofA Downplays Trade War Risk on Global Stocks
The bank warned that equity flows have reached 2025 highs, indicating no clear selling trend in equities due to tariffs.
Bank of America Corp (BofA) downplayed the impact of the trade war on financial markets. According to the bank, equity flows remain far from signaling a sell-off in the stock market.
“Massive capital inflows continue to pour into global equity markets. Global investors are nowhere near selling U.S. or international stocks,” said Michael Hartnett of BofA.
In fact, global equity funds saw approximately $43.4 billion in inflows in the week leading up to Wednesday—the largest amount this year—according to a bank note citing EPFR Global data.
The fact that equity inflows have hit a yearly high and that stock indices in Germany and China—two major exporters to the U.S.—have rebounded since Donald Trump’s election suggests that investors remain skeptical about U.S. tariffs triggering a recession.
Reciprocal Tariffs Impact
However, Hartnett and his team note that market sentiment is starting to reflect the U.S. plan to impose reciprocal tariffs on April 2. For instance, small business optimism in Canada has plunged to historic lows amid expectations of higher U.S. tariffs. They add that bonds and gold would be “far less” vulnerable to a “tariff pandemic” than U.S. and global equities.
The S&P 500 fell last week in a correction—a 10% decline from its record high—amid renewed recession fears. A drop this Friday could mark the benchmark index’s fifth consecutive weekly loss.
So far this year, the index is down 3.7%, underperforming European benchmarks like Germany’s DAX, which has gained around 14%.
ABOUT THE AUTHOR
See More
Sidebar rates
Best Forex Brokers
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals