Summary List Placement
Money is quickly pouring into the stock market as the S&P 500 trades near record highs.
$602 billion has flowed into global stocks in the past five months, exceeding total stock inflows of $452 billion in the past 12 years, according to Bank of America.
A continued rotation out of bonds and into stocks could continue to favor stocks, the bank said.
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Investors have mostly shunned the stock market over the past decade even as stocks cruised to record highs, but that trend seems to finally be reversing.
In the past five months, more cash has flowed into stocks than in the past 12 years, according to a Friday note from Bank of America. $602 billion has flowed into global stocks in the past five months, compared to just $452 billion over the past 12 years, according to the note.
The recent trend reversal could lead to further upside ahead if it continues, BofA said. In the past week alone, $14.6 billion flowed into stocks, according to the note.
While investors shunned stocks over the past decade, companies did not. The fund flows that helped drive the market higher as a bulk of investors stuck with bonds were from corporations via stock buybacks, which totaled $6.3 trillion since 2008, according to the note.
But now, chief investment officers rather then chief executive officers could drive fund flows into stocks, and the market higher in the process, as a rotation into stocks and out of bonds takes place, BofA said.
The lack of fund flows into stocks over the past decade has served as evidence to Fundstrat’s Tom Lee that stocks are not in a bubble.
“Again, I don’t see how this [fund flows data] marks even the proximity of a top for equities,” Lee said in January.
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Source:: Business Insider