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Stocks Enjoy Largest Inflows In 18 Months. But There’s A Caveat…
On Friday, a trader told one financial media outlet that the bull case for equities can only be "confirmed" once the mountain of cash parked on the sidelines is coaxed into markets.
It was a generic assessment for a generic market wrap, but it underscored an important point I've emphasized myself over the course of the summer stock melt-up: There was never an "all-in" moment on the flows side for US equities despite the A.I. frenzy and associated sentiment boost.
Net flows to US-focused equity
Bank deposits are down about $1TR from the April 2022 peak. FRED series DPSACBW027SBOG.
I speculate that the increase in money market funds minus that $1TR represents the “dry powder” that could be deployed to other investments.