A recent survey by BofA Global Research reveals that global investors have dramatically reduced their allocation to U.S. stocks in March—the steepest drop ever recorded. Concerns over stagflation, escalating trade wars, and the perceived end of U.S. exceptionalism have fueled a "bull crash" in sentiment, prompting investors to increase their cash allocations from 3.5% to 4.1%.
Key Findings from the Survey
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Record Drop in U.S. Stock Allocation:
Investors have significantly cut back on U.S. equities as fears of stagnant economic growth and rising trade tensions intensify. -
Increased Cash Holdings:
With uncertainty looming, global investors have boosted their cash holdings, signaling a cautious approach to equity markets. -
Global Growth Expectations Decline:
The survey recorded the second largest drop in global growth expectations on record, reflecting widespread pessimism about near-term economic prospects. -
Shift Toward Eurozone Stocks:
Despite the downturn in U.S. equities, allocations to euro zone stocks have hit their highest levels since July 2021, with the banking sector emerging as a favored segment among investors.
The survey, which included 171 participants managing a total of $426 billion in assets, underscores the current climate of uncertainty. The swift decline in U.S. stock allocations appears to be a response to persistent fears of stagflation and the potential impact of aggressive trade policies.
Relevant FMP APIs for Tracking Market Trends
✅ Historical S&P 500 Constituents API
Leverage this API to analyze shifts in the composition of U.S. stocks, providing insights into how investor sentiment is evolving over time.
✅ Company Rating API
Use this API to access comprehensive financial ratings and performance metrics for companies, which can help gauge the broader market's health and inform investment decisions.
Conclusion
The survey results indicate that as global economic uncertainties mount—stemming from concerns over stagflation, trade wars, and shifting perceptions of U.S. market leadership—investors are increasingly moving away from U.S. stocks. The growing allocation to cash and a stronger tilt toward euro zone equities, particularly in the banking sector, reflect a cautious market outlook. As these trends continue to develop, leveraging reliable data through FMP APIs will be crucial for investors seeking to navigate this volatile environment.
