Not even bank runs (and bank collapses) are sufficient to compel equity investors to capitulate.

That was one simplified way to read the latest weekly flows data, which found nearly $3 billion flowing into US stock funds, despite (or, dare I suggest, because of) all the money flowing out of a few besieged regional lenders.

The $2.8 billion weekly haul came on the heels of a multi-week streak of outflows, which had pushed the YTD exodus from US equities to more than $40 billion.

Overall, equity flows during the week to March 15 were mostly unchanged. The minuscule ~$26 million outflow globally scarcely registered, and certainly not in the context of the pervasive risk aversion that accompanied a meltdown in several small- and mid-sized US banks.

“It’s possible ongoing policy bailouts keep household and corporate savings rates low,” BofA’s Michael Hartnett said.

For context, Hartnett noted that in order for equity outflows to approximate those witnessed during Lehman (or during the original pandemic selloff), redemptions would have to accelerate to between $30 billion and $50 billion.

Bottom line: There was no sign of panic in equity fund flows last week, even if the largest inflow to cash since April of 2020 and a similarly outsized inflow to Treasurys plainly evidenced demand for alternatives to uninsured demand deposits.

As far as the conspicuous absence of capitulation in equities goes, Hartnett asked, “Why save when at the first sign of crisis, government intervenes?”

He went on to wonder whether recent actions on the part of monetary authorities and other government agencies might “maintain [the] moral hazard bid for corporate bonds and stocks.”