The bank identifies potential outperformers in bonds, China, USD, AI, and U.S. midterms as dominant market themes fade.
BofA Securities has flagged a set of contrarian trades poised to benefit as prevailing market narratives weaken. The recommendations target bonds, China equities, the U.S. dollar, artificial intelligence stocks, and sectors tied to the upcoming U.S. midterm elections, according to the bank’s latest strategy note.
The call contrasts with recent consensus positioning, which has favored long-duration assets, a weaker dollar, and AI-driven tech exposure. BofA’s analysts argue these crowded trades may face headwinds as macro conditions shift, creating opportunities in overlooked areas.
No immediate market reaction was specified, but the note highlights potential rotation risks for investors overweight in current market leaders.