Bank of America: If Trump intervenes in the economy to contain the decline in approval ratings, now may be a good opportunity to lay out mid-cap stocks

The Zhitong Finance App learned that Bank of America Securities pointed out that US President Trump's intervention in the economy may benefit currently undervalued mid-cap stocks. Strategist Michael Hartnett believes Trump is likely to intervene to curb the decline in his approval rating. He said that the White House will intervene to prevent the consumer price index (CPI) annual inflation rate from reaching 4% and the unemployment rate soaring to 5%. In this environment, Hartnett suggests going long on undervalued mid-cap stocks by 2026.

Relevant mid-cap ETFs include: S&P Midcap 400 ETF-SPDR (MDY.US), SPDR S&P 400 Mid Cap Growth ETF (MDYG.US), iShares Russell Mid-Cap Mid-Cap ETF (IWR.US), and S&P Mid-Cap Index ETF-iShares (IJH.US).

He also pointed out that the “Big Seven US Stock Companies” may “eat up” the entire market capitalization of the Small-Cap 600 Index (SPSM.US) and the Mid-Cap 400 Index (MDY.US).

Other trading directions with the best potential for relative growth include main sectors closely related to the real economic cycle, such as home builders (XHB.US), retail (XRT.US), paper, transportation (XTN.US), and real estate investment trusts (XLRE.US).