Record High U.S. Equity Allocations

LONDON (Reuters) – Investor allocations to U.S. equities have reached a record high this month, impacting European stocks, commodities, and cash, according to a December survey from BofA Global Research.

This shift originates from U.S. growth optimism, expectations that Donald Trump's potential second term as president will result in tax cuts and deregulation, and anticipated rate cuts from the Federal Reserve.

Allocations to cash are at their lowest since at least April 2021, commodities at their lowest since June 2017, and investors hold the largest underweight in European stocks since October 2022.

Consequently, investors are the most overweight in U.S. equities relative to the euro zone since June 2012, during the sovereign debt crisis in the euro area.