2023-05-26 11:56:41
Three years of inflows to stocks have stopped. A report by Bank of America (BofA) showed on the 26th.
EPFR Global data cited by strategist Michael Hartnett showed that investors were pulling money out of equities and into money market funds (MMFs) and bonds. Stocks saw an outflow of $3.9 billion in the week ending May 24. The outflow was three weeks in a row, and the amount of inflow and outflow from the beginning of the year were almost the same.
About $756 billion has flowed into MMFs so far this year. The inflow is the largest since 2020. “We expect a return to risk-off in late June,” Hartnett said in a note, as the effects of the U.S. rate hikes percolate through markets and financial conditions tighten. Global bond funds received $9.5 billion in inflows for the ninth straight week.
U.S. stocks rose more than 8% in the first four months of this year, but have continued to show no direction in May due to the debt ceiling issue and recession fears.
Funding trends in stocks this year are very different from those of the previous three years. The last three years saw inflows of $175 billion, $949 billion and $182 billion, respectively, according to BofA strategists.
Hartnett’s recommended sell-off level for the S&P 500 is 4,200, about 1% higher than Thursday’s closing. US equity funds withdrew $1.5 billion and European equity funds $1.9 billion in the week ending Friday.
Original title:BofA’s Hartnett Warns of Equity Stress as 2023 Flows Turn Flat(excerpt)
1685107319
#Headwinds #Stocks #Outflows #Inflows #Balanced #Start #Year #Hartnett #Bloomberg