Equities see sizeable weekly inflows as BoFA warns of recession risks

LONDON - Investors pumped in $18.9 billion into equities and $6.3 billion into bonds in the last week after weeks of outflows as BoFA strategists warned against reading too much into the recent rally in stocks.

U.S. stocks bounced nearly 9% since mid-March, cutting their year-to-date losses to less than 5% by March 31 and bringing them to within striking distance of a record high struck in early January.

BoFA strategists said recession risks will "jump" in the coming months as a bull era of central bank excess, Wall Street inflation and globalization is ending, and a bear era of government intervention, social and political polarization, Main Street inflation & geopolitical isolationism is starting.

Portfolios should position for stagflation and dollar debasement, with the energy sector becoming a long-term buy and tech becoming a long-term sell, the U.S. investment bank said in a weekly note. Long-term U.S. yields are headed above 4% by 2024.

In terms of notable weekly flows, BoFA said bonds saw the first inflow in 12 weeks while emerging market equities saw the biggest inflow in seven weeks. The analysis was based on EPFR data.