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Investors are pouring money into Wall Street at a near record-setting pace

Aug 26, 2024, 09:52 IST
Scott Gries/Getty ImagesAdd last week's sharp tech sell-off to the list of things stock traders are willing to overlook.

They poured a whopping $24.6 billion into equities in the week ended June 14, the most since the US election, according to data compiled by Bank of America Merrill Lynch.

But it wasn't a celebration just for stocks. Bonds also absorbed $9 billion in fresh capital. When all was said and done, investors put $35.5 billion into Wall Street over the period, the second-most on record.

Amid the recent broad-based inflows, investors have been loading up on high-yielding fixed income products for a month, BAML finds. Investment-grade, high-yield and emerging-market debt attracted $35 billion over four weeks, the fastest pace since February 2015.

Bank of America Merrill LynchOne main reason why the 3.5% two-day sell-off in S&P 500 tech stocks didn't hurt stock flows is that traders who pulled money from the sector simply rotated into other areas of the equity market.

That included the losers of the so-called Trump trade, such as value and small-cap stocks, according to BAML.

Still, despite the influx of cash this past week, the firm says to tread carefully in the longer term. They see either a "big top" or a flash crash occurring later this year, especially now that we've reached an inflection point in monetary policy.

BAML's best advice for combating that? Buy volatility, which has been locked near record lows for the better part of three months.

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