No signs of equity market capitulation yet – BoFA

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FILE PHOTO: Person walks past a Bank of America sign in New York City

LONDON – Investors pulled money from bonds and pumped money into cash and stocks in the week to Wednesday as equity positioning showed “zero signs of capitulation despite flows and price disconnect”, BofA’s weekly flow report showed on Friday.

Global equities saw a chunky $7 billion into cash and $6.2 billion of inflows into equities while investors pulled $3.5 billion from bonds, according to BofA which is analysing EPFR data.

Among notable flows, investment grade, high yield and emerging market debt saw a seventh consecutive week of redemptions while European stocks saw the biggest outflow in three months.

“‘Inflation shock’ means ‘rates shock’ which means ‘growth shock’ translating into negative returns in credit and stocks in 2022,” BofA analysts led by Michael Hartnett said in their note.

They expect cash, volatility, commodities and emerging markets to outperform credit, stocks and private equity this year.

(Reporting by Julien Ponthus; Editing by Saikat Chatterjee)