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In BofA’s “The Flow Show” note, analysts told investors that the conviction in bonds continues.
The analysts explained in their “flows to know” section that there was $7.3 billion into investment grade bonds, while there is “no inflation fear” with a 23rd straight week of TIPS outflows ($1.6B).
Meanwhile, they stated that there is conviction in emerging markets, with the seventh straight week of emerging market equity and debt inflows ($8.3B).
“Equity conviction returning,” state analysts, with $44.7 billion into stocks in the past four weeks, with “evidence of return to US stocks ($6.7bn inflow this week).”
However, analysts note that tech is not yet seeing love via flows, as it experienced the 10th consecutive week of tech outflows, although it was the smallest in 10 weeks.
Furthermore, the shift to a more positive risk sentiment is noted in BofA’s Bull & Bear indicator, which has risen to 4.2 from 3.5, the highest since Mar 2022 and the biggest three-month surge since August 2020, “driven by strong EM inflow, strong stock market breadth.”
