Stocks and bonds dominated inflows, while cash, gold, and cryptocurrencies faced notable outflows for the week ending May 1, Bank of America strategists said Friday.
According to BofA, equity funds attracted $9.8 billion and bond funds $4.6 billion, while money-market funds witnessed outflows of $1.6 billion.
Cryptocurrency funds experienced their largest outflows since June 2022, totaling $600 million, and gold funds suffered their most significant exodus since January, at $1.1 billion.
Regionally, China recorded its largest inflow in eight weeks, receiving $2.7 billion and Europe saw its first influx since December, with $300 million entering the region. According to the strategists, the “Anything But China” trade has seen a considerable reversal over the past three months.
The U.S. enjoyed its second consecutive week of inflows at $100 million, and emerging market stocks resumed inflows with $3.1 billion, matching Japan’s inflow for its second consecutive week.
Sector-wise, the financial sector saw its largest outflow in eight weeks, losing $700 million, while utilities saw their first inflow since January, also at $300 million.
In the note, BofA strategists noted that although bonds remain in a secular bear market, the risks of a hard landing are so low-priced that an impending bear market rally in bonds, triggered by weaker data, would likely be “vicious.”
Meanwhile, stocks are currently in a “late secular bull market,” which will likely end “with bubble and/or recession.”
In the fixed-income space, investment-grade bonds saw their 27th week of inflows at $3.9 billion. High-yield bonds resumed outflows with $100 million exiting, and U.S. Treasuries and emerging market debt each had their second week of outflows at $300 million and $700 million, respectively.
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Bank loans, however, saw an inflow for the second consecutive week, also at $700 million.
