US equity funds attracted $17.1 billion last week, pulling pulled cash from government bonds, Bank of America Merrill Lynch said on Friday, as investors turned to riskier assets amid hopes for a US-China trade truce and central bank rate cuts.
Global policy makers are smashing Wall Street bears "out of the ball park", BAML Chief Investment Strategist Michael Hartnett said, pointing to the intention of policy makers to reverse bearish sentiment.
The European Central Bank cut interest rates deeper into negative territory on Thursday and pledged indefinite bond purchases, driving European stocks higher. The US Federal Reserve is expected to cut rates by at least 25 basis points next week.
Sovereign funds saw outflows of more than $6 billion in the week to Sept. 11, according to the report, based on EPFR. Some $14.4 billion flowed into equities, some of the biggest inflows since March 2018, but that was entirely due to US increases. Investors continued to shun European equities, however, pulling out $400 million.