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The bank's strategists believe this outflow creates a backdrop for heightened volatility, as market players and policymakers fail to recognize the dangers linked to increasing US Treasury yields.
Global inflows to equity funds are decelerating; they have recently averaged $7 billion weekly, a decrease from $52 billion in July. This signifies increasing caution among investors. Nevertheless, there are no indicators of panic, even as the US Federal Reserve (Fed) contemplates increasing interest rates while oil prices rise above $100 per barrel and diesel costs reach all-time highs.
On August 13, the S&P 500 hit a peak of 7,816.7 points but has since been confined to a tight trading range, according to Bloomberg. Volatility has increased somewhat but stays low.
Doubts about the Federal Reserve's monetary policy and the upcoming US midterm elections in November, along with the ongoing situation with Iran and worries about spending on artificial intelligence, are leading certain investors to take a cautious stance.
According to BofA strategists, even with $1.5 trillion poured into AI in the last three years, minimal evidence exists of widespread productivity improvements in the economy. Additionally, total factor productivity is declining beneath trend levels—a measure that has been associated with consumer confidence for the past 50 years.
source: bloomberg.com
Global inflows to equity funds are decelerating; they have recently averaged $7 billion weekly, a decrease from $52 billion in July. This signifies increasing caution among investors. Nevertheless, there are no indicators of panic, even as the US Federal Reserve (Fed) contemplates increasing interest rates while oil prices rise above $100 per barrel and diesel costs reach all-time highs.
On August 13, the S&P 500 hit a peak of 7,816.7 points but has since been confined to a tight trading range, according to Bloomberg. Volatility has increased somewhat but stays low.
Doubts about the Federal Reserve's monetary policy and the upcoming US midterm elections in November, along with the ongoing situation with Iran and worries about spending on artificial intelligence, are leading certain investors to take a cautious stance.
According to BofA strategists, even with $1.5 trillion poured into AI in the last three years, minimal evidence exists of widespread productivity improvements in the economy. Additionally, total factor productivity is declining beneath trend levels—a measure that has been associated with consumer confidence for the past 50 years.
source: bloomberg.com