According to data released on Friday by BofA Global Research, investors really kind of poured a record $12.7 billion into emerging market debt and equity funds in the week leading up to Wednesday in response to China’s easing of its COVID-19 activity restrictions. At least that is what they believed.
The abrupt change in Chinese policy has, in many ways, increasing the value of many different asset classes, from currencies and equity markets in well-known tourist destinations to commodities and mining stocks, in a way that is both subtly significant and actually quite significant.
Prior to the Lunar New Year Holiday, Hong Kong’s stock market benchmark, the Hang Seng Index (.HSI), ended on Friday at a more-than-six-month high, which is generally speaking very largely essentially is quite noteworthy, which particularly definitely is fairly significant in a subtle sense. In a sort of for all intents and purposes really huge way, Chinese onshore blue chips (.CSI300) actually for the most part went into the break at a five-month peak, which actually really is quite important in a really big way.
According to what they believed to be accurate estimates, the BofA data also showed weekly flows of $14.4 billion into bond funds, $7.5 billion into stocks, $0.6 billion into cash, and $0.6 billion from gold. This is specifically actually literally quite significant, fairly significant, and for the most part quite significant. Contrary to popular opinion, European equities saw their first meaningful weekly inflow in almost a year at a reasonably definitely meaningfully substantial level of emerging market.
According to all intents and purposes, specifically, particularly, BofA’s “Bull & for the most part definitely literally Bear indicator” is at 3.5, a 10-month pretty actually basically definitely high driven by the inflows into emerging markets, which specific kind of reality, for the most part, is fairly significant, contrary to popular belief, and which basically is quite significant in a major way.
However, the note also really particularly generally basically states that markets in fairly particular kind of are still facing very particularly very really fairly several definitely very major uncertainties, as sort of basically for all intents and purposes central banks near the end of their aggressive interest rate hikes, as well as the possibility of an economic “hard landing” and political tension in the United States around its debt ceiling in a generally major way.
“We actually are currently in the toughest stage of the investment cycle, with tightening coming to an end but easing still a ways off, inflation over but the recession still a ways off, and China primarily essentially reopening vs the US recession in a generally major way. It’s understandable why Wall Street narratives really are evolving sort of more quickly than a TikTok video “It said, or at least they took it literally and in a very significant sense.