Skip to main content

Investors piled into bonds and stocks while shedding cash in the week to Wednesday, according to a report on Friday from Bank of America (BofA) Global Research.

The report said this reflected the “end of inflation, end of war, end of U.S. dollar bull” following data this week that showed the U.S. economy is shifting into disinflation mode.

Weekly inflows to bonds totalled $12.1-billion, while stocks saw inflows of $11.6-billion and investors pulled $17.6-billion out of cash funds. Investors also shed $500-million worth of gold, BofA said, citing figures from funds data provider EPFR.

U.S. data on Wednesday showed the world’s largest economy shifting to disinflation mode as consumer prices registered their smallest annual increase in more than two years.

“Mission Accomplished” June CPI (headline 2 per cent to 9 per cent to 3 per cent round trip is now complete),” the BofA analysts wrote.

The U.S. benchmark S&P 500 index is up about 2.5 per cent this week, while Europe’s STOXX 600 has risen 3 per cent as markets react to the prospect of an end to the rate hiking cycle.

U.S. Treasuries saw the largest inflows in 16 weeks, totalling $8.7-billion, the BofA report found, while bank loans clocked their third consecutive week of inflows, the longest streak since May 2022.

In equities, tech attracted $2-billion in inflows, while $1.1-billion exited health care stocks, the largest outflow from this sector in five months. Overall equities inflows have accelerated over the last seven weeks, BofA said The BofA bull & bear indicator, which measures market sentiment, rose to 3.5 from 3.2 on stronger bond inflows and improvement in credit market technicals.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

Follow topics related to this article:

Check Following for new articles

Interact with The Globe