Trump is about to be inaugurated in January, Bank of America Merrill Lynch Hartnett has suggested investors to adjust their portfolios: focus on US bonds, Asian and European stock markets, and gold.

Since Trump's victory, global stock markets have experienced significant divergence, with the US stock market increasing its market value by $1.8 trillion, while emerging markets lost $500 billion and EAFE markets evaporated $600 billion. Bank of America strategist Michael Hartnett advised investors to adjust their investment portfolios before Trump's inauguration in January, focusing on US bonds, Chinese and European stock markets, and gold. Hartnett pointed out that as US financial conditions tighten, the market has prepared for Trump's aggressive policies, showing aggressive asset movements. He warned that although the stock market may continue to rise, the tightening financial environment and the digestion of expectations for Fed rate cuts have caused cracks in leveraged assets, and the rise in long-term interest rates may trigger a risk reversal. Hartnett emphasized that investors have prepared for US risks on inauguration day, but further tightening of financial conditions will change the trading landscape. Bank of America's global fund manager survey in November showed that investors raised their expectations for US economic growth and inflation, and shifted their confidence towards small-cap stocks. He predicted that when cracks appear in Trump's trade policies, there will be a "TINA (There Is No Alternative) Turner" moment, meaning there is no other trading choice besides being long on the US dollar, US stocks, and shorting US bonds. The strong performance of global macro data may be one of the key factors driving the tightening of the US financial environment. Hartnett's analysis pointed out that the reason behind this may be that companies are taking action in advance to cope with tariff policies. Specifically, in October, China's export growth rate reached its highest level since July, the import volume at California ports surged, US jobless claims significantly decreased, and small business pessimism is about to shift. These positive signs of economic activity are occurring against the backdrop of US inflation bottoming out and core inflation falling to a new low of 3%. In terms of investment strategy, Hartnett recommends: 1. Buy US bonds if yields rise to 5%. He believes the Fed will not cut rates until 2025 to suppress inflation expectations, and US bonds will force the Trump administration to lower tariffs. He pointed out that allowing a second wave of inflation under the new government would be political suicide, and although it is difficult to reverse the long-term trend of US government debt and spending, the new government's understanding of massive debt and spending reductions suggests that fiscal spending will decrease. 2. Buy Chinese and European stocks before inauguration day. Hartnett believes that China and Europe will respond positively to the US's "America First" tariff policy, with low interest rates, currency devaluation, and low oil prices in Asia and Europe significantly easing financial conditions. 3. Buy gold. Hartnett expects the demographic turning point to come soon, with the dependency ratio reaching a low of 53% by 2028, marking the peak of the "anti-inflation" population structure; increased energy demand from artificial intelligence makes gold (and cryptocurrencies) the best long-term tool to combat inflation.