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In a week to Wednesday, July 6, inflows to cash were as much as $62.6 billion according to Bank of America strategists.
$2.4 billion went to bonds, while $2.1 billion and $4.6 billion exited gold and equities, respectively. Outflows from gold were the highest in 3 months, according to the bank’s Chief Investment Strategist Michael Hartnett.
The last week also marked the 4th consecutive week of inflows to tech and the 15th consecutive week of outflows from financials. Huge outflows from materials continue to take place, Hartnett added.
The strategist also noted that we are seeing a big rotation from inflation (commodities) to deflation (tech) assets.
“Bigger the outflow, bigger the bounce (see GFC, COVID, China deval, Euro debt crisis); no equity outflows in ’22…summer big trading range rather than big rally for stocks,” Hartnett wrote in a client note.
BofA Bull & Bear Indicator remains “max bearish” at 0, now entering its fourth week at such an extreme reading.
