Investors pile into cash at fastest rate since COVID crisis-BofA

[November 04, 2022]  LONDON (Reuters) - Investors poured $62.1 billion into cash in the week to Wednesday, marking the fastest start to the quarter for cash funds since the depths of 2020 COVID crisis and gold funds saw their 19th straight weekly outflow, BofA Global Research said on Friday.

Equity funds posted $6.3 billion in inflows, with emerging markets funds recording their second straight weekly inflow, with $4.3 billion, and European equity funds posting their 38th weekly outflow, down $900 million, BofA said in its weekly "Flow Show" report, citing data from EPFR.

Stocks got a boost last week from a belief among investors over the prospect of the Federal Reserve shifting the pace of rate hikes down a gear, as the economy shows signs of slowing.

Fed Chair Jerome Powell has since poured cold water over such speculation, given stubbornly high inflation and a resilient labour market.

U.S. Dollar banknote is seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration

"Easy to pivot when unemployment is 8% and inflation is 3%. Much harder to pivot when inflation is 8% & unemployment is 3%," BofA investment strategist Michael Hartnett wrote.

The bank's "Bull & Bear indicator" stayed at 0 for a seventh week, marking its longest period of "max bearish" since the 2008-2009 financial crisis.

(Reporting by Amanda Cooper; Editing by Dhara Ranasinghe)

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