Equity, bond funds see inflows as markets hit rough patch: BofA

LONDON: Funding flows into equities slowed whereas rising market debt and fairness funds noticed the largest redemption in ten weeks as issues about surging inflation pressures and a China slowdown prompted traders to dump well-liked trades, BofA mentioned on Friday.

Traders ploughed $11.8 billion into shares and $77 million into bonds, within the week to Wednesday, in line with BofA’s weekly flows observe primarily based on EPFR knowledge.

Company credit score throughout all courses noticed cash go away with excessive yield and rising market debt seeing the largest outflows at $1.8 billion and $2.5 billion every.

“The bear case is pandemic ending and so is $30 trillion of emergency coverage stimulus and extra bearish Wall St positioning displays issues relating to inflation and China,” analysts led by Michael Hartnett, chief funding strategist on the financial institution, mentioned in a observe recommending purchasers to “promote it”.

BofA analysts imagine that policymakers and politicians at the moment are apprehensive inflation will injury progress and approval scores, leading to a broad-based coverage pivot from pro-growth to anti-inflation insurance policies.

The BofA Bull & Bear indicator in the meantime fell to five.1 from 5.5, in the course of the vary as credit score flows stall and the broader fairness technical image worsens.