U.S. stocks record $448 billion annualized inflow, largest in history

U.S. equity funds have witnessed record-breaking inflows since January this year. According to a report from Bank of America strategists, equity funds have registered annualized year-to-date inflows of about $448 billion. The inflows represent growing investor confidence in the U.S. stock market.

Strategists at Bank of America released a report showing U.S. stock inflows have hit an all-time high of $448 billion as the year ends. The figure is twice as much as those recorded in 2022 and 2023 combined. The inflows have outperformed 2021’s bull market record high of $400 billion. 

Money Market Funds witness growing investor appetite

According to the report, money market funds also witnessed growing demand among investors. Bank of America predicted in the report that these financial products may receive upwards of $1 trillion by the end of the year.

U.S. Stocks see largest annual inflow in history of $448 Billion (and the year isn't over) 🚨🚨 pic.twitter.com/pRF4ht5hd2

— Barchart (@Barchart) November 25, 2024

In the week starting November 3, the equity fund market saw $14.4 billion in inflows, while the bond market inflows reached $9.1 billion. Meanwhile, cryptocurrencies gained $900 million. 

In the same duration, other markets, such as money market funds and the gold market, endured negative flows. Gold saw outflows worth $600 million, while money market funds saw outflows worth $1.3 billion. The report also outlined that Treasury securities witnessed the highest negative flows since December 2023, worth $6.4 billion in the last two weeks. 

According to the report, the financial sector witnessed inflows worth $6 billion in the last four weeks. Healthcare stocks recorded the largest negative flows since December worth $1.1 billion.

U.S. stocks had their seventh straight week of growth with $16.4 billion in inflows. Europe’s eighth losing run continued with outflows worth $3.6 billion while emerging market stocks had their sixth week of outflows, totaling $1.8 billion.

Last week, Hartnett urged investors to invest more money in stocks outside the United States heading into next year. The analyst recommended equities in China and Europe. The S&P 500 has soared by 25% this year, following gains similar to the previous year.

The S&P 500 may hit another big double-digit move next year

Bank of America strategists under Michael Hartnett’s leadership believe the S&P 500 will hit “another big double-digit move” in 2025. The strategists believe the declining bond yields in inflation and fewer interest-rate cuts at the beginning of 2025 will fuel the upsurge, which they described as the hidden catalyst for maintaining equity gains and evading sharp reversals. 

The S&P 500 trades near all-time highs due to a strong sentiment on the U.S. economy, the hype around the rise of artificial intelligence innovations, and Federal Reserve rate cuts. According to the Kobeissi Letter, investors are all in on U.S. stocks.

According to strategists, it would be surprising to see the meltdown not continue shortly because few do not believe President-elect Donald Trump will allow a bear market. The strategists also think the recently elected Trump administration intends to use rising stocks and crypto as a strategy to encourage “animal spirits.”

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