Large Cap Lead the Largest Inflow to Stocks ($51.2B) Since March, Highest Cash Outflow in 14 Months - BofA Flow Show

September 17, 2021 6:43 AM EDT
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Last week marked another strong inflow to equities, notes BofA Chief Investment Strategist Michael Hartnett.

As much as $51.2 billion went into stocks last week, which marks the biggest number recorded since March this year. On the other hand, the market facilitated the largest outflow from cash since July 2020 ($61.8 billion). Elsewhere, $16.1 billion went into bonds and $37 million to gold.

“Monster reallocation cash-to-stocks as tax redistribution threat recedes & Fed expected to remain Wall St-friendly,” Hartnett comments.

Moreover, the last week marked the largest inflow to US large cap funds ever ($28.3 billion), the 12th consecutive week of tech inflows and the largest one in six months ($3.2 trillion), as well as the largest inflow to energy since June ($1.0 billion).

“Investors thinking growth pause over (retail sales in real terms were strong, needed to avert recession threat) FMS says buy small cap/value/junk/EM...the cyclicals that have been sold in recent months; on contrary, investors thinking growth splutters (as US fiscal disappoints & emergency stimulus ends) & inflation stays well above 3% (supply chain disruption in goods, services, trade, labor...note US small business saying labor shortages worst in 50 years) FMS says buy unloved defensives & energy; note energy (& financials) only global sectors with price-to-book ratio below 20-year averages, just as commodity bull impressively begins without China catalyst,” Hartnett adds.

Interestingly, this year’s YTD annualized return from commodities is the best since 2000.

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