Bank of America’s top investment strategist Michael Hartnett is urging investors to flip the script, backing Main Street over global elites as cooling inflation, AI disruption and political pressure reshape markets ahead of U.S. midterms.
The expert laid out a bold call in his latest Flow Show report: Investors should “stay long Detroit, short Davos” — favoring U.S. small and mid‑caps, banks, REITs, emerging markets, and international equities over the so‑called Magnificent 7 and other Big Tech giants.
Hartnett’s core message is that markets are beginning to price a political and economic pivot toward affordability.
That shift matters.
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Assets punished during the big bond bear market of the early 2020s are quietly outperforming the elite “Davos” trades that dominated portfolios for years.
Since the Trump inauguration in January 2025, the so-called “Bro Billionaire” basket – an equally weighted mix of Nvidia Corp. (NASDAQ:NVDA), Meta Platforms Inc. (NASDAQ:META), Palantir Technologies Inc. (NYSE:PLTR), Tesla Inc. (NASDAQ:TSLA), ARK Innovation ETF (NYSE:ARKK), Apollo Global Management Inc. (NYSE:APO), Blackstone Inc. (NYSE:BX), Oracle Corp. (NYSE:ORCL), Coinbase Global Inc. (NASDAQ:COIN), and Bitcoin (CRYPTO: BTC) are up roughly 6%, while U.S. small caps – tracked by the iShares Russell 2000 ETF (NYSE:IWM) – are up closer to 13%.
That divergence may look modest, but historically it’s how regime changes begin: slowly, then suddenly.
The expert indicates that a series of macroeconomic and political shifts are underpinning this rotation. With inflation surprises tilting to the downside and artificial intelligence (AI) adoption cooling the labor market, affordability pressures — on energy, healthcare, credit, housing, and electricity — have moved to the political foreground.
Hartnett said the team stays long Main Street and short Wall Street until Trump’s approval rating rises on affordability-focused policy.
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A key risk sits with the former market leaders as Hartnett warns of a flip from asset-light to asset-heavy business models.
