Investors show strong confidence in global equity markets

Investors are currently showing a strong interest in stocks, despite potential risks from trade wars. Michael Hartnett from Bank of America has noted a significant influx of money, or "monster" flows, into global stock markets. This trend suggests that many believe tariffs will not lead to a recession. Stock funds saw an impressive $43.4 billion in inflows just last week, the highest amount this year. Hartnett pointed out that markets in Germany and China, key exporters to the U.S., have risen since the recent U.S. election, indicating confidence among investors. Furthermore, there are signs that some sentiment is shifting in response to U.S. tariff plans. For instance, small business optimism in Canada has fallen to record lows. Hartnett argues that bonds and gold are likely to be less affected by tariffs compared to U.S. and international stocks. Recently, the S&P 500 has faced challenges, including a drop of 10% from its highest point, raising concerns about a possible recession. If the index declines again on Friday, it would mark five straight weeks of losses. In contrast, European markets like Germany’s DAX have performed better, gaining about 14% this year.