Bank of America’s latest asset allocation advice: invest in three major sectors including commodities, bearish on the US dollar

Glonghui, April 20th | Bank of America investment strategist Michael Hartnett has released his latest asset allocation recommendations, suggesting that investors consider allocations in commodities, the Chinese market, and U.S. consumer discretionary stocks, while maintaining a bearish view on the U.S. dollar.

Hartnett points out that the current market is affected by tariff volatility, rising U.S. fiscal pressures, and capital shifts away from U.S. assets. Commodities, he notes, serve as a hedge against inflation, a weakening dollar, and geopolitical risks. Regarding the Chinese market, Bank of America is optimistic about the sustained momentum in technology. In addition, China’s ample energy supply helps support its AI industry development.

By contrast, U.S. consumer discretionary stocks are considered to offer the highest contrarian investment value. The sector has largely priced in the risks of stagflation, and if policies shift towards consumption stimulus in the future, a rebound may occur.

For sell recommendations, Bank of America explicitly advises reducing exposure to the U.S. dollar. Strategists believe that tariff policies have undermined the dollar’s safe-haven status, while uncertainty over NATO positions and the loosening of the petrodollar system could also put pressure on the dollar. Looking ahead, under economic growth pressures, policymakers may prefer to accept a weaker dollar rather than raise bond yields to attract capital.