Michael Hartnett, Chief Investment Strategist at Bank of America, weighed in on the flows in a week to Wednesday.
Gold saw inflows of $0.9 billion as traders continue to position for tighter financial conditions. Bonds saw outflows of $8.7 billion from bonds while equities recorded outflows of $17.5 billion - the largest outflow YTD. As much as $55.4 billion were outflows from cash.
“Since Nov’21 Nasdaq peak inflows to stocks in 16 of 20 weeks ($229 billion), private clients bought stocks 17/20 weeks,” Hartnett said in a client note.
The strategist also reflected on the discourse surrounding Fed’s tightening process by noting that “75bps is the new 25bps.” For him, this signals that the rates shock is just beginning.
“75 global rate hikes YTD – highest net % central banks hiking since 2008…era of higher volatility has begun; but Charge of Hike Brigade follows >1000 cuts since Lehman and $23tn of QE; asset, housing, consumer, commodity, consumer inflation of 2022 demands that coming Quantitative Tightening is draconian,” Hartnett added.
Similarly, Citi strategist Chris Ma noted that US funds saw a second week of large outflows.
“US$17.5bn outflows from equity funds — In the week ended 20 April 2022, bond funds saw US$8.7bn of outflows and equity funds US$17.5bn of redemptions,” the analyst wrote in a note.
By Senad Karaahmetovic