EBC Markets Briefing | Hedge funds ramp up bets on US stocks

Global stocks gained on Wednesday as a flurry of new policies from US President Donald Trump combined with robust corporate earnings to bolster investor optimism.

Trump did not announce tariffs at the start of his second presidency, but he vowed to hit the EU with fresh levies and said his administration was discussing imposing a 10% tariff on goods from China next month.

He also announced a new $500 billion, private sector investment to build AI infrastructure in the US. OpenAI, SoftBank and Oracle will form a joint venture and begin with a data centre in Texas.

US stock trading hedge funds kicked off the week with gross leverage levels in their highest range since 2010 and European stock traders were also bullish, according to Morgan Stanley.

The US share of global cross-border investment projects has soared to its highest level on record. The country attracted far more new FDI greenfield projects in the 12 months to last November than China and Europe.

Growth in the US economy is forecast to continue outpacing other advanced nations, according to IMF figures. The US is expected to grow by 2.7% in 2025, compared with an expansion of just 1% in the eurozone.

The Nasdaq 100 index reversed the downtrend last week. Now it has climbed to the high hit in 6 January above 21,720, and the rise should continue towards the next resistance around 21,900.

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