Strategists at Bank of America said investors are turning to cash assets, with money market funds recording their largest inflows since April 2020, offsetting outflows from the prior week.

BofA cited EPFR global data: for the week ended October 7, money market funds attracted US$166.4 billion, bonds saw US$33.8 billion, stocks drew US$12.4 billion, gold gained US$2 billion and cryptocurrencies took in US$600 million.

Key weekly flows: technology funds posted their largest inflows in six weeks at US$3.5 billion; the financial sector recorded its largest outflow since March at US$3 billion.

The strategist team led by Michael Hartnett said cash will stay on the sidelines until large-scale monetary easing and/or sustained Federal Reserve rate cuts materialize, noting that "no rate cut, no cash exit."

Note: money market fund assets under management have grown from US$5 trillion in 2023 to US$8 trillion; with short-term Treasury bill yields holding at 4.2%, money market funds can generate US$330 billion in interest income each year.

On market breadth, 50% of constituents in the global equity index are trading below their 50-day and 200-day moving averages, the highest since April 2025.

But a reliable contrarian buy signal for risk assets would only be triggered when a net 88% of market indices fall below their moving averages; unless technology-heavy U.S., Taiwan and South Korea equity indices quickly reverse, that signal will not appear in the near term.

Regional equity fund flows: U.S. stocks recorded inflows for the first time in three weeks at US$3.3 billion; European stocks saw inflows for a second consecutive week at US$200 million; Japanese stocks posted their largest outflow since May at US$3.3 billion; emerging market equities drew inflows for a second straight week at US$2.1 billion.

Fixed income: investment-grade bonds saw inflows for a third consecutive week at US$10.3 billion, the highest in eight weeks; high-yield bonds recorded a second straight week of outflows at US$600 million; U.S. Treasuries drew inflows for a fifteenth consecutive week at US$16.2 billion, the highest since April 2025; emerging market bonds saw inflows for a tenth consecutive week at US$2 billion; bank loans recorded inflows for a fifth consecutive week at US$2.4 billion, the highest since February 2025.