Investors are piling into stocks in a way to a degree not seen for more than a decade. Bank of America’s global fund manager survey showed the percentage of portfolio managers who are overweight U.S. stocks soared to 29% — its highest level since August 2013 — from 10% before the U.S. presidential election. Stocks have ripped to record highs since Donald Trump secured a second term. In that time, the S & P 500 is up 3.8%, while the Dow Jones Industrial Average and Nasdaq Composite have gained more than 4% each. Those gains come as investors bet the incoming administration will ease regulation on business and lower taxes. Small caps, which stand to benefit greatly from less regulation, reduced taxes and faster economic growth, have outperformed large caps since the election. The iShares Russell 2000 ETF (IWM) has soared 7.8% in that time. .SPX DJIA,.IXIC,IWM YTD mountain SPX, Nasdaq, Dow and IWM year to date BofA’s chief investment startegist Michael Hartnett noted this trend is likely to continue. “Post-election results show net 35% [of fund managers surveyed] expect small caps to outperform large caps, which would have been the most since Feb’21,” he said. To be sure, Trump’s economic agenda — which includes imposing a host of tariffs on imported goods — could yet drive inflation higher. This would make it next to impossible for the Federal Reserve to justify lowering interest rates, which could hurt equities — especially small caps. Elsewhere on Wall Street this morning , Redburn Atlantic initiated Nvidia with a buy rating. The firm’s price target implies upside of more than 20%. “Nvidia has exploded into the public consciousness,” the firm wrote in a note to clients. “However, given the stellar share price performance, questions have emerged regarding the durability of the AI market as well as the technological sustainability of Nvidia’s position and financial returns. We see two primary growth engines that the market underestimates.”
Investors go long stocks by the most in 11 years after Trump’s win, survey shows
