Tiny Selloff Triggers ‘Monster’ Stock Inflow, Cash Exodus

Tiny Selloff Triggers ‘Monster’ Stock Inflow, Cash Exodus

Somebody bought the dip. Global equity funds took in more than $51 billion over the last week, a period which coincided with what counts as a "selloff" these days in US stocks. It was the largest weekly inflow since March (figure below). The YTD haul is now $776 billion. It was a "monster reallocation from cash to stocks," BofA's Michael Hartnett said, citing the receding threat of tax redistribution and expectations that the Fed will "remain Wall Street friendly." Democratic infighting an
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3 thoughts on “Tiny Selloff Triggers ‘Monster’ Stock Inflow, Cash Exodus

  1. H-Man, speaking of those benefactors, on some strange whim, I meandered over to some Fed site that shows the monthly buying of treasuries. I was trying to figure out what they were buying —– the short stuff, the belly or long bonds. The numbers were numbing. Which leads me to wonder, who will replace those benefactors when they hit the road?

  2. Well, I guess they won’t be hitting the road anytime soon.
    If there is one thing I’ve learned lurking around these pages in the past couple of years it’s that these very benefactors are not going to let markets go on cold turkey, liquidity-wise.
    Considering that even “thinking about thinking about tapering” can cause a minor sell-off there is exactly zero chance for them “hitting the road”, if that means anything resemblang a return to the status quo pre-Covid. Not to mention any return to the status quo pre-GFC. The most one could reasonably expect is some gradual (read: glacial) reduction of additional monthly purchases in the hope of one far day being able to raise interest rates by a whopping 0.25 percent.

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