Bank of America (BofA) has released its weekly report “The Flow Show,” which reveals that bond inflows have reached their longest eight-week inflow streak since November 2021. Meanwhile, US equity outflows have persisted for the third week in a row, with BofA analysts stating that outflows have resumed in financials after four weeks of inflows and from US growth after two straight weeks of inflows.
Private Clients’ Portfolio Allocation
According to the report, BofA’s private clients currently have a portfolio allocation of 61% in stocks, 20.7% in bonds, and 11.4% in cash. This data provides an insight into how private clients are positioning their portfolios in the current market environment.
The report also highlights the ETF flows of BofA’s private clients over the past four weeks. The data shows that private clients have been purchasing EM debt, healthcare, and industrials while selling bank loans, high yield, and real estate investment trusts. This information may be useful for investors who are interested in tracking the market movements of BofA’s private clients.
Short-Term Gain, Long-Term Pain
The BofA analysts also discuss the possibility of a “short-term gain, long-term pain” scenario arising in the current market environment. The analysts believe that fiscal stimulus panic has been successful in averting a recession in the early 2020s, but deficits are rising once again. The report notes that the “great irony of inflationary 2020s” will be the Fed’s forced adoption of Yield Curve Control (YCC) to bail out the US government in the next recession. The analysts predict that this event will mark the start of the next great bull market in risk.
US Equity Outflows
BofA’s report also reveals that financials and US growth sectors have experienced outflows after consecutive weeks of inflows. The data provides insights into the current sentiment of investors towards these sectors.
In summary, BofA’s weekly report provides valuable insights into the current state of bond inflows and US equity outflows. It also provides data on the portfolio allocation and ETF flows of BofA’s private clients, which may be useful for investors who are interested in tracking the market movements of this group. Additionally, the report offers the BofA analysts’ predictions on the potential impact of the Fed’s adoption of YCC during the next recession.