(Boursier.com) – Operators are not afraid, or more so, according to the Fed. They continued to invest heavily in stocks and bonds during the week ended August 17, betting on a less aggressive Federal Reserve as inflation may have peaked in the United States. According to EPFR Global data picked up by ‘Bloomberg’, global equity funds attracted $7.9bn over the period, with US stocks notably recording a second week of positive inflows, with €9.2bn in inflows incoming.
Global bonds saw inflows of $500 million, led by investment-grade debt, even as US Treasuries suffered their largest outflows since September 2019. In Europe, equities rose experienced their 27th ‘negative’ week with $2.2 billion in withdrawals.
“Very few fear the Fed” as more traders expect a policy shift from the US central bank and the same-stock frenzy returns, says Michael Hartnett, strategist at Bank of America. However, “whether the Fed knows it or not, they are far from finished” (note: raising rates), with inflation expected to be between 5% and 6% by spring, still well on the above the Federal Reserve’s target.
In more detail, US large caps, growth stocks, small caps and value all recorded positive flows. By sector, tech stocks recorded their biggest inflow in five months, followed by financials, while materials, real estate and energy were left out.
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