Strategists at Bank of America have observed a notable slowdown in global equity inflows, with US stock funds registering their most significant three-week cumulative outflow since the start of the year. The total withdrawal from US equity funds reached $14.2 billion during this period, according to the latest research note.

For the week ending September 9, global equities attracted $9.8 billion in fresh capital. Meanwhile, bonds saw inflows of $17.5 billion, cash equivalents drew $12.9 billion, crypto assets added $1.3 billion, and gold recorded $600 million in inflows. The report, citing EPFR Global data, highlights that the average weekly inflow into equities over the past three weeks stood at $7 billion, a sharp contrast to the $52 billion weekly average witnessed in July.

Strategists including Jared Woodard and Michael Hartnett pointed out that despite surging bond yields and commodity prices, the market has yet to exhibit signs of "widespread panic." They described the current environment as a fertile ground for heightened volatility, characterized by a "numb market combined with hawkish policy."

Breaking down the key flows: investment-grade bonds extended their inflow streak to 23 consecutive weeks, adding $5 billion. The materials sector continued its run of positive flows for a tenth straight week, capturing $1.9 billion.

Within the fixed-income sphere, high-yield bonds resumed outflows, losing $100 million. Emerging market bonds attracted $3.9 billion, while municipal bonds saw inflows for the 21st consecutive week, gaining $400 million. Treasuries recorded their 11th straight week of inflows, pulling in $6.6 billion.

In the equity markets, European stocks saw modest inflows of approximately $300 million. Japanese equities posted inflows for the third consecutive week, adding $800 million, and emerging market stocks returned to positive territory with $1.5 billion in inflows.

By investment style, US value stocks ($2 billion) and small caps ($100 million) recorded inflows, while growth stocks ($1.6 billion) and large caps ($5.8 billion) faced outflows. Sector-wise, technology led with the highest inflows at $2.2 billion, whereas consumer ($500 million), healthcare ($300 million), and utilities ($300 million) experienced the most significant outflows.