BofA Flags Contrarian Trades in Bonds, China, Dollar, AI, and US Midterms

BofA Securities has highlighted several contrarian trades that it believes could outperform as some of the market's most entrenched investment narratives begin to lose steam.

The bank's ideas span bonds, China, the US dollar, artificial intelligence, and the upcoming US midterm elections. In its latest note, BofA Securities argues that these areas have become overly popular or consensus-driven, making them ripe for contrarian bets.

One of the key areas where BofA Securities sees opportunity is in bonds. The bank notes that many investors are underweight on bonds due to concerns about inflation and interest rates. However, it believes this could create a buying opportunity as bonds may have already priced in these risks.