Berkshire Hathaway reveals $4.3 billion stake in Alphabet, cuts Apple
Investing.com -- Foreign inflows into U.S. equity funds remain unusually strong, tracking an annualized $134 billion so far this year, Bank of America (BofA) says, a pace second only to the $163 billion recorded in 2024.
Weekly flows were broad-based, with bond funds taking in $18.7 billion in the past week, equities $18.3 billion, money-market funds $7.7 billion, gold $2.9 billion and crypto $22 million.
Korea stood out with its second-largest inflow on record at $2.0 billion and the biggest four-week total ever at $3.8 billion.
By sector, healthcare saw its strongest inflow since January 2021 at $1.9 billion, while energy posted a five-month high at $900 million.
BofA strategists led by Michael Hartnett argue that risk assets like equities and cryptocurrencies are stalling due to “bubble in expectations," pointing to a market narrative built on aggressive policy support.
They note that government support is increasingly justified on “national security” grounds, and that the Fed is not only cutting rates from elevated levels but is also “set to launch quantitative easing (QE)" in the first half of next year.
Furthermore, next year’s tax cuts are expected to be paired with $2,000 stimulus checks, reinforcing the policy backdrop that is driving expectations higher.
Hartnett also writes that “macro trade = PMI acceleration = long commodities, international, small cap,” noting that a backdrop of tax cuts, rate cuts, tariff cuts, and U.S. industrial-policy efforts to “catch-up with China energy/power advantage in AI war” should push PMI toward 55.
He adds that the “inability of early-cyclical, rate-sensitive equity sectors such as real estate, homebuilders, retail, chemicals, and packaging to rally on prospect of rates down-PMI up” signals AI-driven pressure on job security. A stabilization in consumer cyclicals remains necessary, he says, for small caps and industrial cyclicals to work.
By region, U.S. equities posted a ninth week of inflows at $6.4 billion. European inflows resumed at $800 million, emerging-market equities saw a third week of gains at $5.4 billion, and Japan recorded its first outflow in three weeks and the largest in five at $900 million.