Gold prices just lower; monthly gains on track
Investing.com - Investors are becoming gloomy over the prospects for economic growth in the United States and abroad due to the impact of President Donald Trump’s tariff plans, a BofA survey of European fund managers showed.
Earlier this month, Trump announced punishing reciprocal tariffs on countries around the world, arguing that they were necessary to correct what he has deemed to be longstanding trade imbalances. The president later partially postponed the levies on many of these countries following deep volatility in stock and bond markets.
Late on Friday, the White House also temporarily halted tariffs on a range of electionics like smartphones and computers. Trump has also reportedly floated potentially granting exemptions to car-related tariffs already in place.
Against this backdrop, BofA’s survey of 195 panellists with $444 billion in assets under management found that 82% of respondents said they think global output will weaken over the coming year "on the back of the Trump administration’s tariff increases" -- the highest proportion on record.
A net 89% also see the U.S. economy cooling the near term, leading the global growth slowdown, analysts at BofA said.
Recession concerns are also rising, with 49% of respondents expecting to see a so-called "hard landing" -- or rapid decline in economic activity -- in the next 12 months. Over half also project higher inflation worldwide.
Still, just 4% anticipated weaker growth in China, the world’s second-largest economy, thanks to expectations that Beijing will roll out stimulus measures aimed at bolstering consumption and offsetting the effect of an escalating trade war with Washington.
More than a third of the participants in the survey conducted between April 4 and April 10 see Europe registering more tepid growth over the coming 12 months. A net 60% expected stronger activity last month.
Recent bullishness around European equities has waned, the analysts said, with a net 19% expecting short-term gains for stocks in the region. Still, a plurality anticipates Europe will be the best-performing equity market globally in 2025, the BofA analysts led by Andreas Bruckner said.
On a sector basis, the biggest cut in investor positioning occurred in banks, which lost its spot as the consensus overweight industry in Europe to insurance. Autos and retail were the least preferred sectors.
Among European countries, the respondents favored the cyclical German equity market, the survey said.