BofA Says 'Stay Long Detroit, Short Davos' Amid Trump's Affordability Push — What Does It Mean?

• BofA’s chief equity strategist, Michael Hartnett, noted that Wall Street is “sensibly rotating from AI spenders to beneficiaries, services to manufacturing, U.S. exceptionalism to global rebalancing.”
• The firm recommended that investors remain short of the “Bro Billionaire” stocks, including Tesla, Palantir, and Nvidia.
• The report recommended that investors stay long on “Main Street,” such as small-cap stocks, real estate investment trusts, and banks.

Bank of America strategists reportedly stated on Friday that pressure on Wall Street is unlikely to ease until President Donald Trump’s approval ratings rebound.

According to BofA’s latest Flow Show report, as cited by MarketWatch, the firm’s proprietary Bull & Bear Indicator is currently at a nearly two-decade high of 9.6, the highest since March 2006.

BofA’s Bull & Bear indicator measures trade sentiment on a zero-to-ten scale, with zero meaning ‘Extreme Bearish’ and ten meaning ‘Extreme Bullish’.

Explaining what the Bull & Bear indicator’s reading means, the firm stated in its report that the current signal is one of “peak positioning, peak liquidity, peak inequality,” according to the report.

Detroit Versus Davos

BofA’s chief equity strategist, Michael Hartnett, noted that Wall Street is “sensibly rotating from AI spenders to beneficiaries, services to manufacturing, U.S. exceptionalism to global rebalancing.”

The firm recommended investors stay short of the “Bro Billionaire” stocks, including Tesla Inc. (TSLA), Palantir Technologies Inc. (PLTR), and Nvidia Corp. (NVDA).

It recommended that investors stay long on “Main Street,” such as small-cap stocks, real estate investment trusts, and banks, according to the report.

According to a Reuters report cited by TradingView, the firm noted that “Bro Billionaire” stocks are down 6% since President Donald Trump’s inauguration in January 2025. On the other hand, small-cap stocks are up 13%, the firm noted.

Trump’s Affordability Push In Focus

The firm picked small and mid-cap stocks as its favorite for a “boom” on Main Street in the run-up to the midterms, as President Trump focuses on cutting prices of energy, healthcare, housing, and electricity through Big Oil, Big Pharma, Big Banks, and Big Tech, respectively.

“We are long Main St, short Wall St until Trump approval rating up on policy pivot to address affordability,” the firm stated in its latest Flow Show note, according to the report.

The midterm general election will be held on Nov. 3, 2026, across all states in the U.S.

At the time of writing, the iShares Russell 2000 ETF (IWM), which tracks the Russell 2000 index, was up by 1.34%; the Invesco QQQ Trust ETF (QQQ) rose 0.71%; and the SPDR S&P 500 ETF (SPY) gained 0.56%. Retail sentiment on Stocktwits about the iShares Russell 2000 ETF was in the ‘bearish’ territory.

Also See: BITF Stock Just Shot Up 6% Today Morning – Here’s Everything To Know About Bitfarm’s Rebranding And Redomiciliation To US

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