From Investing.com: 2024-04-12 04:06:14

U.S. large cap stocks experienced their largest weekly outflow since December 2022, totaling $15.8 billion, as traders worry about sticky inflation delaying rate cuts and geopolitical tensions adding caution. This shift was part of a broader $19.6 billion outflow in the stock market, according to Bank of America. Markets reacted to strong U.S. inflation data by pushing back expectation for a Federal Reserve rate cut to September from June.

In Japan, stocks saw their first weekly outflow in over three months, while major equity markets in the U.S., Japan, and Europe remain at or near record highs. Investors are shifting towards inflation hedges like gold, which is also near record highs, and supporting large U.S. tech stocks with ‘monopolistic cash flows’.

The BofA report highlighted a “Anything But Bonds” sentiment driving demand for inflation hedges and large U.S. tech stocks. U.S. Treasury yields are near five-month highs, with 2-year yields up almost 70 basis points and 10-year yields around 79 bps higher this year. The coming decade may bring higher inflation and cost of capital, leading to a “buy bond humiliation” when recession hits.



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