Investor sentiment has plummeted to levels not seen since significant historical downturns, with the American Association of Individual Investors (AAII) reporting bearish sentiment above 55% for four consecutive weeks, a record high since early March 2009. The AAII's four-week moving average of bulls minus bears stands at a dire -40, with bulls at 28.3% and 21.6% in recent weeks, while bears reached 58.1%, indicating extreme pessimism among investors. This bearish outlook is reflected in the drastic reduction of exposure to US stocks, with investors slashing their allocations by a record amount in recent weeks, according to Bank of America. A survey by BofA revealed that fund managers are now 23% underweight in US stocks, marking the largest monthly drop in allocation this century by 40 percentage points from the previous survey, and a 60 percentage point decline over the last three months. The shift away from US equities is stark, with Commodity Trading Advisors (CTAs) heavily shorting US stocks across major indices like the S&P ($22 billion), Nasdaq ($4 billion), and Russell ($6 billion). Conversely, there has been a significant move towards European equities, with CTAs holding a record long position in European stocks, driven by the largest ever spread between short US and long European equities, as reported by Goldman Sachs. The global economic outlook is also darkening, with 63% of global investors expecting a weakening world economy within the next 12 months. Institutional investors have turned increasingly negative, with a 25% shift to pessimism in March, marking the second-largest change in sentiment in 31 years, following the 2020 Crisis spike, according to BofA. Amidst these shifts, European stock markets have seen substantial inflows, with investors pouring approximately $4 billion into European equities over the last four weeks, the most in a decade. This has led to a 13% year-to-date increase in the Euro Stoxx 50 index, significantly outperforming the S&P 500, which has declined by 3.5%. The US dollar's strength has been a point of contention, with President Donald Trump reportedly considering measures to weaken it, aiming to boost exports and reduce the trade deficit. However, experts warn that such moves could undermine the dollar's status as the world's leading international currency.