Bank of America Report Shows $39 Billion Inflow into US Stocks in One Week, Strategists Prefer Risk Aversion

According to the latest report from Bank of America, as of the week ending October 14, US stock funds saw an inflow of $39 billion, with an annualized inflow expected to reach $636 billion, setting a new historical high. US Treasury bonds recorded inflows for the 16th consecutive week, marking the longest streak since August 2024. Despite this, the strategist team led by Michael Hartnett at Bank of America still prefers to avoid risks, citing reasons such as rising real yields, the price trends of AI and bank stocks, and potential volatility from the midterm elections. EPFR data shows that global stock funds had inflows of approximately $64.5 billion, with large-cap US stocks attracting $32.5 billion, while growth, value, and small-cap stocks saw inflows of $1.6 billion, $1.2 billion, and $1.1 billion, respectively. Technology stocks had inflows of $10.7 billion, while financial and consumer stocks experienced outflows of $1.4 billion and $600 million, respectively. Emerging markets saw inflows of $17.7 billion, with Japan attracting $400 million and Europe experiencing outflows of $1.5 billion. Safe-haven assets were also popular, with US Treasuries seeing inflows of $3.6 billion, investment-grade bonds inflowing $3.5 billion, municipal bonds inflowing $4.5 billion, emerging market bonds inflowing $800 million, and high-yield bonds experiencing outflows of $900 million for the third consecutive week. Cash funds saw outflows of $53.1 billion, gold had inflows of only $100 million, cryptocurrencies saw outflows of approximately $600 million, and bond funds overall had inflows of $11.8 billion. The flow of funds contrasts with the cautious statements from Bank of America strategists.

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