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A week of “monster” global stock inflows has Bank of America (BAC+0.05%) strategists concluding that “no one really believes” the trade war automatically spells an economic recession or bear market.
In a new report released Friday, they said that investors pumped $43.4 billion into global stock funds between March 12 and 19, while U.S. stocks notched inflows of $34.1 billion, the highest so far this year.
“Global investors are not anywhere close to short U.S. or global equities,” Chief Investment Strategist Michael Hartnett wrote. Chinese and German markets have popped 20% since the U.S. election, further evidence that investors aren’t convinced the trade war will torpedo the market.
This doesn’t mean President Donald Trump’s tariffs, and whiplash from related delays and threats, aren’t having an effect, he said. Instead, the April 2 deadline on fresh duties is “infecting global data” — sending small business confidence in Canada to lows that are “worse than 9/11, Lehman and Covid,” for example.
Tariffs are expected to slow U.S. economic growth and drive up consumer prices. They could make plane parts more scarce for Boeing and raise energy costs in places such as New York, and retaliatory tariffs may be felt most by counties that voted for Trump, per a March 15 analysis by the New York Times (NYT+0.39%).
Hartnett and his team see bonds and gold as “way less vulnerable to [the] ‘tariff pandemic’ than U.S. and international stocks.”
The S&P 500 index fell about 0.7% as of about 12:05 p.m. on Friday, taking its decline this year to about 4.2%. The Nasdaq Composite index dropped 0.6%, for a year-to-date plunge of 8.8%, and the Dow Jones Industrial Average shed 239 points, taking its drop in 2025 to 1.6%.
For the U.S. and Europe, tariffs and related clashes threaten $9.5 trillion worth of business, per the American Chamber of Commerce to the EU — a committee and lobby in Belgium that counts Amazon (AMZN+0.37%) and Disney (DIS+0.58%) among its members.