BofA’s Hartnett Says Equity Inflows Surge on Soft Landing Hopes

Equity funds saw the biggest weekly inflow in 18 months amid growing investor confidence the US economy is headed for a soft landing, according to Bank of America Corp.

That’s in stark contrast, however, to BofA strategist Michael Hartnett’s view: “Nothing screams ‘bear market in conviction’ more than money-market funds seeing $1 trillion of inflows year-to-date,” Hartnett and his team wrote in a note on Thursday. The strategist correctly predicted the US stock slump last year, and has remained bearish in 2023 even as the S&P 500 rallied.

Global stocks attracted $25.3 billion in the week to Sept. 13, the most since March 2022, according to EPFR Global data cited by BofA. But amid the renewed optimism on the US economy, Hartnett and his team see a bearish broader picture, with cash and Treasuries having attracted the bulk of inflows and both asset classes on track for a record year.

Investors Are Still Piling Into Cash