Bank of America strategists led by Michael Hartnett say cash will stay on the sidelines until the Federal Reserve delivers big monetary easing or sustained rate cuts, writing "No rate cuts, no cash cuts." Money market funds drew their biggest weekly inflow since April 2020, taking in $166.4 billion in the week to Oct. 7, and money market assets have climbed to $8 trillion from $5 trillion in 2023, now throwing off $330 billion in annual interest income with the Treasury bill yield at 4.2%. The BofA Bull & Bear Indicator fell to 8.1 from 8.8 on weaker breadth and wider spreads in high-yield bonds and subordinated bank debt, remaining in "sell" territory, while net 50% of global equity indexes trade below both their 50-day and 200-day moving averages, the most since April 2025, against a contrarian buy signal that triggers at net 88%. The strategists called the midterms the most likely catalyst for a 10% move in stocks in either direction into 2027 and lean risk-off heading into the vote given the central bank tightening cycle, with 54 hikes so far in 2026, and tighter financial conditions. In the latest flows, bonds drew $33.8 billion, equities $12.4 billion and gold $2 billion, while crypto funds saw $600 million in outflows; tech funds took in $3.5 billion, the biggest inflow in six weeks, financials lost $3 billion, the biggest outflow since March, U.S. equities saw their first inflow in three weeks at $3.3 billion, EM equities drew $2.1 billion in a second week of inflows, Europe added $200 million, also a second week, and Japan saw outflows of $3.3 billion, the biggest since May.
Bank of America CorpBofA strategists' note on cash staying sidelined until Fed rate cuts is the source of the story, but it concerns market strategy rather than a company-specific financial event.
NVIDIA Corporation
