Treasuries Set For Worst Streak Since 1776

Bullish investors poured money into tech stocks for the 10th straight week, the longest streak in two years, Bank of America (BofA) Global Research said, while US Treasuries are set for their worst yearly performance since the Declaration of Independence, Alun John reported for Reuters.

The aggressive pace of Fed rate hikes that has helped slow inflation along with pandemic-era stimulus, has weighed heavily on US Treasuries I Photo: Treasury Department

There was a net $10.3 billion of inflows into equity funds in the week to Wednesday, with investors putting $5.1 billion into tech stocks, the most since May, and $4.9 billion into emerging market stocks, BofA said citing data from provider EPFR.

Investors have been buying stocks on increasing hopes that the US economy will achieve a soft landing - slowing enough to bring inflation back to the Federal Reserve's target, but not dramatically.

However, the aggressive pace of Fed rate hikes that has helped slow inflation along with pandemic-era stimulus, has weighed heavily on US Treasuries, which are set to decline in value for the third straight year, something that "has never occurred in the 250-year history of the US republic," according to BofA's calculations.

The flows into equities have also been narrowly based, with tech stocks accounting for $34 billion of inflows year to date, vastly ahead of the next largest sector, consumer stocks, with $4 billion in inflows.

This means that the breadth in global markets is "breathtakingly bad" BofA said, with MSCI's All Country World index at its narrowest since 2003.

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