Bank of America’s Michael Hartnett identifies China as the top long within an emerging global equity bull market. His latest Flow Show report argues that investor positioning is rotating away from U.S. exceptionalism toward broader international exposure. He describes the backdrop as a “new world order = new world bull,” driven by fiscal excess and shifting policy dynamics.

Hartnett advises staying long international stocks as the end of deflation catalysts for Japan and Europe shifts to China. Global equity inflows remain strong, with $71.1 billion entering funds last week. While U.S. equities led, emerging markets drew sustained demand, with China alone recording $8.5 billion in inflows, its tenth-largest weekly intake since 2002.

However, the strategist warns positioning is stretched. The BofA Bull & Bear Indicator hit 9.3, the highest since February 2018, reflecting bullish fund manager sentiment. Cash allocations fell to a record 3.3%. Historically, when the indicator exceeds 9.3, average three-month returns have been flat for global equities and negative for the S&P 500.