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Bank of America: Gold to buy.. and oil to sell
Bank of America (NYSE:BAC) revealed in its latest report that money market funds recorded the largest outflows since April 2024, with $83.5 billion withdrawn in the week ending January 15.
During the week, stocks saw inflows of $13 billion, while bonds attracted $11.4 billion. Gold also gained momentum with inflows of $1.3 billion, while cryptocurrencies faced outflows of $900 million.
Bank of America strategists led by Michael Hartnett said that commodities have been the best performing assets since the Federal Reserve cut interest rates by 50 basis points in September.
He advises investors to stay in commodities amid rising global PMIs, increasing Chinese money supply, and a peak US dollar. However, he suggests switching from oil to gold “as the geopolitics in Russia/Ukraine/Middle East shifts from war to peace.”
For equities, Hartnett believes the downside is protected by Trump’s policies, but warns that the upside could be “constrained by focus, valuation and positioning.”
Regionally, US equities saw their third straight week of inflows of $11.6 billion through January 15, while Japanese equities saw their largest inflow in 11 weeks at $1.1 billion.
Emerging markets saw outflows of $2.2 billion, and Europe saw its 16th straight week of redemptions, losing $700 million.
In fixed income, investment-grade bonds continued their run of consecutive inflows with $5.5 billion inflows over 64 weeks. US Treasuries gained $3.5 billion, marking their fourth straight week of inflows. However, high-yield bonds saw outflows of $100 million, and emerging market debt lost $300 million for the second straight week.
Bank loans remained a strong performer, adding $2.1 billion in the 15th straight week of inflows.
