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☆ First quarter 'dash for cash' largest since early 2020 -BofA
▼ + stars: | 2023-03-31 | by ( ) www.reuters.com time to read: +1 min

Flows into cash of $60.1 billion in the week to Wednesday were down from $142.9 billion the previous week, but the quarterly dash for cash was the biggest since the first quarter of 2020, BofA said on Friday, citing data from EPFR. Markets have gyrated wildly this month following the collapse of U.S. regional lenders Silicon Valley Bank and Signature Bank and Europe's Credit Suisse (CSGN.S). "Panic, flush, unwind, then Fed blinked and off we rally into April," BofA said in the report. If year-to-date inflows of $37.4 billion continue at the same pace through 2023, it would be the largest annual inflow on record. For the week to Wednesday, gold funds attracted a net $500 million, and bond funds a net $2.3 billion.

☆ Investors pile into cash but "no equity capitulation" - BofA
▼ + stars: | 2023-03-17 | by ( Lucy Raitano | ) www.reuters.com time to read: +2 min

REUTERS/Henry Nicholls/File PhotoCash funds saw a “huge” inflow of $112.7 billion in the latest week, BofA said, citing EPFR data. Inflows into cash for the first quarter of 2023 are on course to be the highest since the second quarter of 2020, BofA said. Meanwhile, equity funds saw a “tiny” weekly outflow of $26 million, and investors pulled $2.3 billion from bonds and put $600 million into gold. The turmoil in markets has spooked investors, but BofA said equity flows had been unchanged week-on-week and there was “no equity capitulation”. There was a “flight to quality” in fixed income according to BofA, with $9.8 billion poured into Treasuries - the largest weekly inflow since May 2022.

☆ U.S. regional banks under pressure to raise deposit rates - analysts
▼ + stars: | 2023-03-16 | by ( Tatiana Bautzer | ) www.reuters.com time to read: +1 min

NEW YORK, March 16 (Reuters) - U.S. regional banks are expected to pay higher rates to depositors to keep them from switching to larger lenders, banking analysts said, following the collapse of Silicon Valley Bank and Signature Bank. The potential for stricter regulation aimed at regional banks will also make it more expensive for them to operate, posing a drag on earnings, he said. Silicon Valley Bank, based in Santa Clara, California, collapsed on Friday, followed by New York-based Signature Bank, in the second and third largest bank failures in U.S. history. BofA on Monday cut target prices for regional bank stocks including Ally Financial (ALLY.N), Citizens Financial Group (CFG.N), Fifth Third Bancorp (FITB.O) and First Republic Bank (FRC.N), partly because of the expected increase in deposit pricing. Rating agency Fitch put some regional banks on negative credit watch because of a "rapidly changing funding and liquidity environment," it said in a report on Monday.

☆ Morgan Stanley, BlackRock funds among those exposed to regional bank failures
▼ + stars: | 2023-03-13 | by ( David Randall | ) www.reuters.com time to read: +3 min

REUTERS/Lucas JacksonNEW YORK, March 13 (Reuters) - Mutual funds managed by Morgan Stanley (MS.N), Fidelity, and BlackRock (BLK.N) appear to be among the most exposed to the collapse of Silicon Valley Bank and Signature Bank, Morningstar data showed, as a market selloff has erased more than $100 billion of U.S. banks' value. Few funds held positions that alone appeared large enough to badly damage them, though further selloffs in regional bank shares could increase the pressure, said Todd Rosenbluth, head of research at data analysts firm VettaFi. Regulators closed Signature Bank on Sunday, marking the third-largest bank failure in U.S. history, after Silicon Valley Bank on Friday became the country's second-largest bank to collapse. The $3.9 million BlackRock Future Financial and Tech ETF , meanwhile, held 3% of its assets in Signature and 1.7% in Silicon Valley Bank as of the end of December. Prior to the fall of Silicon Valley Bank, financial shares had drawn some U.S. investors, who expected rising interest rates to lift bank margins.

☆ Investor dash for cash pumps U.S. money market funds to record high - BofA
▼ + stars: | 2023-03-10 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 10 (Reuters) - Assets invested in U.S. money market funds have reached a new all-time high of $4.9 trillion this year, as soaring short-term interest rates have sent investors rushing into cash, BofA Global Research said on Friday. Money market funds invest in highly liquid near-term instruments such as cash and short term debt securities. So far this year, investors have put $192 billion into cash, adding $18.1 billion in the week to Wednesday, BofA said. They invested $68.1 billion in cash a week earlier, more than at any time since the depths of the pandemic in 2020. Market expectations for further rate hikes from the U.S. Federal Reserve, which have sent U.S. yields higher, have also made money market funds more attractive.

☆ A man's world: gender parity will take more than five generations
▼ + stars: | 2023-03-08 | by ( Joice Alves | ) www.reuters.com time to read: +6 min

The analyses of the data in the WEF's Global Gender Gap report takes into consideration gender disparity in economic opportunities, education, political empowerment, health and safety. The BofA data shows that U.S. companies with greater gender diversity have offered a median 20% higher return on equity since 2005 than those who lack it. According to consultancy firm EY, almost half of European financial services investors state that gender diversity in the boardroom significantly influences their decision to invest in a company. For senior executive roles, gender parity still looks out of reach. U.S. companies focused on gender diversity on boards and senior executive level have achieved 43% lower earnings risk in subsequent three years than those who lack such diversity, BofA said, citing its own analysis.

☆ Investors pour the most into cash since COVID in latest week - BofA
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +2 min

Cash funds saw inflows of $68.1 billion, BofA said citing EPFR data. Investors ditched equities and gold, which tends to suffer in an environment of rising real interest rates. Such a credit event could originate from the "Anglo-Saxon real estate" sector which has been hit by higher rates, the BofA analysts wrote. Bonds saw inflows of $8.4 billion, while global stocks recorded outflows of $7.4 billion and investors pulled $900 million out of gold funds. Investors meanwhile shed $1.8 billion in emerging market debt and bought $2.4 billion in emerging market equities.

☆ Oil price owed to more-than-expected Russian oil in the market, commodities expert argues
▼ + stars: | 2023-03-02 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailOil price owed to more-than-expected Russian oil in the market, commodities expert arguesFrancisco Blanch, head of global commodities at BofA Global Research, explains how key geopolitical factors are shaping commodity markets.

☆ Cash-strapped homeowners are swarming to HELOCs at the fastest rate in more than a decade to pay for food, gas, and renovations
▼ + stars: | 2023-03-01 | by ( Alcynna Lloyd | ) www.businessinsider.com time to read: +6 min

Higher mortgage rates have curbed cash-out refinancing, one way of tapping the equity. HELOC rates have climbed, too, but homeowners have flexibility with how much financing they buy versus taking out a 30-year loan on the house. HELOC rates averaged 7.8% in mid February. High mortgage rates have created a lock-in effect in the US housing market as the majority of US home loans were created with 30-year rates below 4%. Since October, when he bought the property and started renovations, the interest rate on his loan has increased from 6.5% to 7.5%.

Data showed the U.S. trade deficit in goods increased moderately in January, with both imports and exports rising solidly. FEDWATCHBofA Global Research warned the Fed could even hike interest rates to nearly 6%. "We're talking about stickier inflation in the economy and higher interest rates for longer. ET, Dow e-minis were up 43 points, or 0.13%, S&P 500 e-minis were up 3.5 points, or 0.09%, and Nasdaq 100 e-minis were down 2.25 points, or 0.02%. The three main indexes are headed for monthly declines, with the blue-chip Dow (.DJI) in the red for the year.

☆ Fed might raise policy rates to 6% - BofA
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +1 min

Feb 28 (Reuters) - The U.S. Federal Reserve may hike interest rates to nearly 6%, BofA Global Research said, as strong U.S. consumer demand and a tight labor market would force the central bank to battle inflation for longer. The number is higher than a peak of 5.4% by September that traders are currently pricing in. "Aggregate demand needs to weaken significantly for inflation to return to the Fed's target. Further supply-chain normalization and a slowdown in the labor market will help, but only to a degree," said BofA in a noted dated Feb. 27. Reporting by Siddarth S in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.

Meanwhile, money markets are currently pricing in a terminal rate of 5.3% by July. BofA Global Research also expects a 25bps hike in the Fed's June meeting, pushing the terminal rate up to a 5.25%-5.5% range. It had earlier pencilled in two rate hikes of 25 bps each in the March and May meetings. "Resurgent inflation and solid employment gains mean the risks to this (only two interest rate hikes) outlook are too one-sided for our liking," BofA wrote in a client note. Before the recent U.S. data, J.P. Morgan had forecast the terminal rate at 5.1% by the end of June.

☆ Investors pull cash from classic risk plays as Fed rate picture shifts
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +2 min

BofA Global Research's weekly "Flow Show", released on Friday, showed the largest outflows from technology funds since September, the largest outflows from emerging market debt funds in 14 weeks, and the largest outflows from junk debt funds in eight weeks. Emerging market debt funds saw outflows of $700 million, the largest weekly outflow in 14 weeks, according to the report which attributed the decline to debt investors reducing risk. High yield - or junk - debt saw outflows of $2.6 billion, the largest in eight weeks, and tech funds had $1.1 billion of outflows, the most since September. Elsewhere, there were $5.5 billion inflows to bonds, $1 billion inflows to cash, $300 million to equities and $45 million to gold. Reporting by Alun John; editing by Amanda Cooper and Susan FentonOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: U.S. stock rally faces uphill climb after mixed inflation data
▼ + stars: | 2023-02-14 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

[1/2] A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 27, 2023. Tuesday's closely watched inflation report on U.S. consumer prices showed the smallest annual price increase since late 2021. But the data did little to dispel expectations that the Federal Reserve will have to continue raising rates higher and keep them elevated for longer to drive inflation lower. The CPI data continues the trend of moderating annual inflation rates that have helped propel this year's rally in risk assets. Some have also expressed concern about investor positioning, which has grown stretched in recent weeks as market participants piled into the stock rally.

☆ Prices in China's service sector are 'edging up a bit,' says economist
▼ + stars: | 2023-02-10 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailPrices in China's service sector are 'edging up a bit,' says economistHelen Qiao of BofA Global Research says some small Chinese businesses in the sector now have more pricing power.

☆ Investors show 'no inflation fear' as they snap up bonds, equities and sell cash - BofA
▼ + stars: | 2023-02-03 | by ( ) www.reuters.com time to read: +2 min

Equity funds got a $16 billion injection while bonds saw inflows of $7.8 billion, BofA said citing EPFR data, as investors showed conviction in both asset classes. In another sign of investors' confidence that global inflation may have peaked, cash funds saw $300 million in outflows, while gold funds logged outflows of $1.3 billion. Investors bought $7.3 billion of investment grade bonds and shed $1.6 billion of Treasury Inflation-Protected Securities - the 23rd week of outflows from the inflation-sensitive bonds. Tech names wrapped up their tenth consecutive week of outflows, although it was the smallest outflow in the last ten weeks. It has clocked up its biggest three-month surge since August 2020, driven by strong emerging market flows and strong stock market breadth, BofA said.

☆ Optimism over China, peak bond yields draw flows into stocks -BofA
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: +2 min

Jan 27 (Reuters) - Weekly inflows into stocks in the week to Wednesday were the largest in six weeks, data from BofA Global Research showed, as China's reopening of its borders and expectations that bond yields have peaked fed investor risk appetite. Investors poured $13.9 billion into stocks with $3.4 billion flowing into European shares - the largest to the region's equities in almost one year, the bank said on Friday. Healthcare stocks, a defensive play, and technology stocks, have seen their worst four-week outflows in four years, BofA said. Over the same period, emerging market debt and equity inflows averaged $7.1 billion, their strongest in nearly two years. Gold drew in $500 million, BofA data showed, while investors shed $2.3 billion worth of cash.

“The small miss on Microsoft’s cloud earnings forecast is likely just a reflection of the new economic reality that businesses are facing and not a harbinger of something worse," said Bob O'Donnell, chief analyst at TECHnalysis Research. It forecast third-quarter revenue in its so-called intelligent cloud business would be $21.7 billion to $22 billion, just below the analyst average forecast of $22.14 billion, according to Refinitiv. He said revenue from OpenAI-related businesses would show up in revenue for Microsoft's cloud service Azure in the future. Azure cloud product revenue in the second quarter rose 31%, in line with estimates compiled by Visible Alpha. The company expects that revenue to drop to $11.9 billion to $12.3 billion in the current fiscal third quarter.

☆ Analysis: Wall Street heavyweights warn against ‘Goldilocks’ hopes
▼ + stars: | 2023-01-25 | by ( David Randall | ) www.reuters.com time to read: +5 min

The odds are “too high on Goldilocks; there’s still no easy way out,” analysts at BoFA Global Research wrote on Tuesday. Stocks tend to perform poorly in economic downturns, with the S&P 500 falling an average of 29% during recessions since World War Two, according to Truist Advisory Services. Those rebounds inevitably crumbled, leaving the S&P 500 with a 19.4% annual loss, its worst since 2008. The most recent rally has lifted the S&P 500 more than 11% from its October lows. Strategists polled by Reuters at the end of 2021 saw the S&P 500 gaining a median of 7.5% last year.

Microsoft said its third-quarter intelligent cloud revenue would be $21.7 billion to $22 billion, while analysts forecast $22.14 billion. In the second quarter, Microsoft's cloud services business helped offset a slump in the personal computer market. Azure has also steadily grabbed market share from leader Amazon.com Inc's (AMZN.O) Amazon Web Services (AWS). Azure ended 2022 with 30% share in the cloud computing market, up from 20% in 2018, according to estimates from BofA Global Research. Microsoft's revenue rose 2% to $52.7 billion in the three months ended Dec. 31, compared with the average analyst estimate of $52.94 billion, according to Refinitiv IBES.

☆ Microsoft's profit beats estimates on strong cloud performance
▼ + stars: | 2023-01-24 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Matt Mills McKnight/File PhotoJan 24 (Reuters) - Microsoft Corp (MSFT.O) reported a better-than-expected quarterly profit on Tuesday as strong performance at its cloud services business helped offset a slump in the personal computer market, sending its shares 4% higher in extended trading. Azure has also steadily grabbed market share from leader Amazon.com Inc's (AMZN.O) Amazon Web Services (AWS). Azure ended 2022 with 30% share in the cloud computing market, up from 20% in 2018, according to estimates from BofA Global Research. Sales at Microsoft's More Personal Computing segment, which includes Windows, devices and search revenue, declined 19% to $14.2 billion as the PC market continued to shrink. Microsoft's revenue rose 2% to $52.7 billion in the three months ended Dec. 31, compared with the average analyst estimate of $52.94 billion, according to Refinitiv IBES.

European stocks have vastly outperformed their U.S. peers. The euro STOXX (.STOXXE) benchmark has beaten its U.S. peer, the S&P 500 (.SPX), by over 18 percentage points since September. "It's a very big move in European gas prices and that has dramatically improved the outlook. "Lower gas prices are surely a positive, but their rapid fall also tell us that they can rise just as fast should things go wrong. A closely watched index of European corporate credit (.MERER00) has seen its yield fall nearly 50 basis points this year.

☆ Analysis: Europe Inc earnings season a test for market optimism
▼ + stars: | 2023-01-23 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

In a sign analysts were unprepared for such optimism, Citi's economic surprise indicator for the euro zone (.CESIEUR) jumped last week to its highest since July 2021. "Companies are telling us that it's going to be harder to pass on rising costs to customers in 2023 as economic growth slows," said Nigel Bolton, co-chief investment officer of BlackRock Fundamental Equities. Fourth-quarter earnings for STOXX 600 companies are forecast to have grown by 10.7% year-on-year, the slowest in two years, according to Refinitiv I/B/E/S data. Earnings are seen bouncing back to growth of 11.4% in the final quarter of the year. Analysts downgrade earnings forecastsReporting by Joice Alves Editing by Josephine Mason and Mark PotterOur Standards: The Thomson Reuters Trust Principles.

☆ China reopening spurs record inflows into emerging market funds -BofA
▼ + stars: | 2023-01-20 | by ( ) www.reuters.com time to read: +2 min

LONDON, Jan 20 (Reuters) - Investors poured a record $12.7 billion into emerging-market debt and equity funds in the week to Wednesday, in response to China's easing of its COVID-19 restrictions on activity, data on Friday from BofA Global Research showed. The sudden shift in Chinese policy has boosted many different asset classes, from commodities and mining stocks to currencies and equity markets in popular tourist destinations. The BofA data also showed weekly flows of $14.4 billion into bond funds, $7.5 billion into equities, $0.6 billion into cash and $0.6 billion from gold. BofA said there were $0.2 billion of inflows to European stock funds, the first inflows in 49 weeks. BofA's "Bull & Bear indicator" is at 3.5, a 10-month high driven by the inflows into emerging markets.

☆ Stocks buoyed by cheery data after BOJ damp squib
▼ + stars: | 2023-01-18 | by ( Nell Mackenzie | ) www.reuters.com time to read: +4 min

Data showed British inflation dropped to a three-month low of 10.5% in December, the latest sign that global inflationary pressures are abating. Also helped by a string of positive earnings updates, Europe's STOXX 600 index (.STOXX) rose 0.4% to its highest level since April 2022. Earlier in the day MSCI's broadest index of Asia-Pacific shares outside of Japan (.MIAPJ0000PUS) rose 0.24%, and S&P 500 futures gained 0.26%. The dollar at one point rose as much as 2.7% against the Japanese yen, but was last 0.78% higher at 129.11. Data on Tuesday showed China's economic growth had slumped in 2022 to 3.0% - the weakest rate in nearly half a century.

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