Investors pour $63.8bn into US stocks, yank cash from bonds: BofA

Investors channeled money into US stocks at the fastest pace in three months, while withdrawing funds from corporate bonds in the latest week, according to a Bank of America Global Research report released on Friday. The report, which uses data from EPFR, indicated that global stocks saw net inflows of $79.3 billion in the week ending Wednesday, with US stocks accounting for $63.8 billion of that amount. Simultaneously, investors pulled $1 billion from investment-grade bonds and $2.5 billion from high-yield bonds.

Bank of America identified the "three Ps"—positioning, policy, and profits—as peaking, suggesting that positioning is overly bullish, profits are likely to peak next year, and Federal Reserve monetary policy is tightening. The bank stated that the "run it hot" policy posture is over.

For the fourth quarter, BofA highlighted "three Cs"—commodities, credit, and Chinese bonds—as key risks. A basket of commodities, led by oil, has risen 47% in 2026, with tightening supply, particularly in diesel, posing a risk of higher inflation. High-yield credit spreads are near record lows, and a sudden repricing of credit risk could signal that the Fed is overestimating GDP. The report also noted a potential deflation-related "China Shock 2.0" in Europe, evidenced by a record German trade deficit and falling industrial production, with China being the only major economy experiencing falling bond yields in 2026.