Bank of America Corp. strategist Michael Hartnett issued a note on February 13. He states U.S. trade policies create a "new world order." This shift drives an "anything but dollar" trade. Investors are moving from U.S. equities to international assets.
Hartnett expects this global rebalancing to benefit international stocks. Emerging market commodity producers gain from rising artificial intelligence demand.
Capital inflows into European and Japanese stock funds surpass U.S. fund flows this year. Other international stock funds also see higher inflows than U.S. funds.
A separate Bank of America Securities note from February 13 reports record underweight positioning on the U.S. dollar. This data reinforces the move away from the currency.