LONDON (Reuters) – Global investors have revised their outlook for the global economy in the wake of Donald Trump’s victory as U.S. president, now expecting higher growth than initially expected, as well as higher inflation. strong, shows the monthly survey of Bank of America (BofA) of fund managers.
This translates into higher allocations to US stocks, particularly small caps, which are domestically focused and more likely to benefit from a stronger US economy.
The BofA survey covers 179 managers collectively managing $503 billion in assets. Among respondents who agreed to respond to the BofA survey after Donald Trump’s victory, 23% said they expected the global economy to strengthen over the next 12 months, the highest rate since August 2021.
This is a turnaround from the October survey, which showed more respondents believed the economy would weaken in the coming 12 months.
The outlook for inflation has also changed: 10% of those surveyed after the US election expect inflation to rise over the next 12 months, the highest rate since July 2021.
In October, 44% of respondents believed that global inflation would be lower in the coming 12 months. This proportion fell in November to 16%.
Investors increased their exposure to US stocks. A net 29% of them are overweight U.S. stocks, the highest rate since August 2013, the survey also showed.
(Written by Alun John; Claude Chendjou, edited by Blandine Hénault)
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