Investors pour record money into equities even as bond yields rise: BofA

  • 3/19/2021
  • 00:00
  • 3
  • 0
  • 0
news-picture

LONDON (Reuters) - Investors put a record $68.3 billion into equity funds in the week to March 17, even as a spike in government bond yields sent the high-flying Nasdaq index reeling, BofA data showed on Friday. U.S. equity funds sucked in $53 billion as ultra-easy monetary policy continued to boost risk appetite. BofA warned of tightening global financial conditions, however, with eight interest rate hikes across the world so far this year versus five cuts. Meanwhile, the U.S. Federal Reserve pledged to look past inflation and keep interest rates near 0% until at least 2024. Still, the yields on 10-year notes spiked on Thursday to 1.75%. That move sparked a massive sell-off on Wall Street with the tech-heavy Nasdaq 100 slumping 3.1%, wiping off more than $400 billion from company valuations in a single session. BofA said the “uber-dovish Fed backfired” with bond vigilantes moving quickly to try to bully the central bank into yield curve control - pinning down yields on bonds of a particular maturity. Global equity funds have attracted $347 billion so far this year, matching record inflows seen for 2017 as a whole. On an annualised basis, this year’s inflows are a “breathtaking” $1.6 trillion, BofA said. “We are in (the) midst of (the) strongest macro data of our lives,” BofA investment strategist Michael Hartnett wrote in a note to clients. But some cracks have started to appear. He said the Spring vaccine shortage in Europe and emerging markets means any disorderly bond yield rise could be negative for second quarter economic growth. GRAPHIC: One year since the worst market cap loss -

مشاركة :