BofA: Cash sees biggest weekly inflow in two months, crypto attracts $1 billion

Cash inflows totaled $35.1 billion last week, marking the largest in two months, according to Bank of America.

For the week ending July 10, equity funds saw $10.2 billion in inflows, while bond funds attracted $12.4 billion, continuing their 29-week streak. Cryptocurrency investments witnessed a notable inflow of $1.0 billion, the highest in five weeks. Meanwhile, precious metals faced outflows, with $18 million exiting gold investments.

In terms of equity sectors, technology continued to benefit, receiving $1.9 billion in inflows, followed by materials and financials, which attracted $1 billion each.

Regionally, U.S. equities experienced $5.1 billion in inflows over the past two weeks. However, Japan and Europe continued to see outflows, losing $2.1 billion and $1.0 billion, respectively, over the past three and eight weeks. Emerging markets (EM) equities maintained positive momentum with $5.2 billion in inflows over the past six weeks.

The report also noted divergent trends by investment style. U.S. large-cap funds saw $3.3 billion in inflows, whereas U.S. growth funds experienced outflows of $0.2 billion.

When it comes to macro, BofA strategists said soft landing expectations are “on the rise as consensus expects any US slowdown to be “transitory”,” while rate cuts work “quickly and forcefully.”

“We say “sell the 1st rate cut” for credit & stocks as hard landing probabilities set to rise given trajectory of US labor market, consumer spending & capital spending,” strategists added.

In fixed income, investment-grade (IG) bonds marked their 37th consecutive week of inflows, accumulating $5.2 billion. High-yield (HY) bonds also showed positive movement with $0.9 billion in inflows over the past two weeks. Meanwhile, government and Treasury securities saw a steady $3.5 billion in inflows over ten weeks.