According to Bank of America Global Research, tech stocks had $18.6 billion in inflows in the first quarter of the year, the third highest quarterly inflow on record, and have drawn funds in the last week.
Tech stocks had $18.6 billion in inflows in the first quarter of the year, according to Bank of America Global Research on Friday, the third-greatest quarterly inflow on record. They have attracted funds in the past week, as well as large flows to cash and bonds.
In the week ending Wednesday, cash equivalent money market funds saw $81.8 billion in inflows, the most in 13 weeks, according to BofA’s weekly review of flows in and out of global markets, which includes data from EPFR.
The bank attributed the inflow to quarter-end impacts.
In the week, there were $14.2 billion in inflows to stocks in general, $1.1 billion to technology, and $13.4 billion to bonds, with $9.7 billion to investment-grade corporate paper, according to the Bank of America.
The data doesn’t contain Thursday saw all three major U.S. indexes decline by approximately 1%, dragged down by high oil prices as a result of Middle East tensions, and the S&P set for its largest weekly drop since October.
That weekly milestone is due in part to the relentlessness with which U.S. stocks gained in the first quarter, with tech companies leading the way, allowing key indices to frequently reach new record highs.
In terms of cash flows, the Bank of America notes that over the last five Fed rate cuts, flows to money market funds increased in anticipation of the first cut, slowed significantly after the Fed began cutting, and began to decline 12 months later.
“Cash as a percentage of (assets under management) will fall into rate cuts as cash underperforms other assets,” the analysts noted in their report.
According to CME’s Fedwatch tool, current market pricing predicts that the Fed will lower interest rates by about two-thirds by its June meeting.
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