TSX runs higher on rate cut expectations
Investing.com -- Global markets saw broad-based inflows across asset classes in the week through Wednesday, with investors allocating to equities, fixed income, cash, crypto and gold, Bank of America said in its latest Flow Show report.
Equity funds attracted $16.6 billion, while bond funds drew $19.7 billion, extending their streak of inflows to an 18th week.
Money market funds added $6.8 billion, crypto funds $3.1 billion and gold funds $1.4 billion, according to strategists led by Michael Hartnett.
Regional flows showed renewed appetite for China, where stocks pulled in $3.9 billion, the biggest weekly intake since April.
In contrast, European equities saw $1.2 billion in redemptions, marking a second straight week of outflows — the first such stretch since February.
U.S. equity funds gained $8.5 billion, with materials leading sector inflows at $4.7 billion, while utilities and real estate recorded small outflows.
“Quietly China has been world’s best performing stock market over the past 2 years, but China stocks remain near lows vs China bonds, in stark contrast to the U.S., Europe & Japan, where stocks are at all-time highs vs government bonds,” Hartnett said.
In the note, Hartnett also pointed out dozens of “lucky numbers” that reflect broader market and policy dynamics.
For instance, central banks have already delivered 91 rate cuts in 2025, the fastest pace of easing since 2020.
U.S. equity valuations remain elevated, with the S&P 500 trading at a 5.3x price-to-book ratio and a trailing P/E multiple of 27.4x, levels exceeded only 2% of the time in the past 125 years.
Meanwhile, the “AI Big 10” — a group that includes the Magnificent Seven along with Broadcom, Oracle and Palantir — now accounts for 39% of the U.S. stock market.
By investment style, large-cap U.S. stocks drew $5.5 billion, small caps $800 million and growth funds $600 million. Value funds saw about $400 million in redemptions.
Within sectors, financials gained $2.9 billion, healthcare $900 million, consumer $500 million and technology $300 million. Utilities and real estate posted outflows of $28 million and $300 million, respectively.
In fixed income, investment-grade bonds led with $12.5 billion in inflows, followed by $400 million into high-yield bonds and $800 million into emerging-market debt. Municipal bonds and Treasuries also saw steady demand.