Money market funds had the largest outflows on record

© Reuters. Cash market funds had the biggest outflows on document – BofA

Throughout the week ending October 11, cash market funds witnessed their largest outflows on document, with $108.9 billion being withdrawn, in response to Financial institution of America strategists.

Nonetheless, this huge outflow from cash market funds didn’t translate into a lift for shares. Equities recorded their second consecutive week of outflows, dropping $5.2B, whereas gold noticed a lower of $1.1B. In distinction, bonds attracted inflows of $2.1B throughout the identical interval.

Strategists be aware {that a} surge in yields above 5% or oil costs exceeding $100 per barrel might affect the potential for a rally in oversold belongings.

When it comes to fund flows, Treasuries recorded their thirty sixth consecutive week of inflows, marking the longest streak since August 2010. However, financials skilled their twelfth consecutive week of outflows, and well being care noticed its eighth straight week of outflows, the longest streak since April.

In a regional breakdown of equities, america had inflows of $300 million, whereas rising markets noticed their second consecutive week of outflows at $600M. Japan recorded outflows of $900M, and Europe marked its thirty second consecutive week of outflows, with $1.9B leaving the area.

The Financial institution of America Bull & Bear Indicator is at present at an “excessive bearish” stage of 1.9, which is seen as a contrarian purchase sign for danger belongings.

The indicator traditionally means that following such purchase alerts, median 3-month returns suggest a possible rise of 5.4% for US shares, 7.6% for world shares, and 9.1% for shares in comparison with investment-grade bonds, with a mean enhance of 6.4% for high-yield bonds in comparison with Treasuries.