Bank of America: Investors flock to US stocks, betting on Trump's re-election and Fed rate cuts

Strategists at Bank of America have stated that investors are flocking to the US stock market as they anticipate a rate cut by the Federal Reserve in September and an increased likelihood of Donald Trump winning the election. The Bank of America team led by Michael Hartnett cited data from EPFR Global, indicating that in the week ending Wednesday, US stock funds attracted approximately $45 billion, marking the fourth largest inflow of funds in history. Small-cap funds received $9.9 billion, the second largest ever, while large-cap funds saw an inflow of $27.4 billion. The strategist mentioned that traders have turned bullish ahead of the Fed's first rate cut. He added that investors are now pricing in a 100% chance of a rate cut in September, a 75% chance of Trump winning the US presidential election, and a 68% chance of a "soft landing" in the next 12 months. He believes that risk appetite is rotating rather than fading, and anticipates funds flowing from the dollar to gold and from large corporations to small businesses

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