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(Bloomberg) — Buyers are dumping equities and money alike in favor of bonds as they place for the chance that the Federal Reserve persists with hawkish coverage strikes, Financial institution of America Corp. strategists say.

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World fairness funds misplaced $7 billion in outflows within the week via Feb. 22, whereas $3.8 billion left money funds, in accordance with a word from the financial institution, citing EPFR World knowledge. At $4.9 billion, bonds drew additions for an eighth straight week within the longest such streak since November 2021, the crew led by Michael Hartnett stated. 

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US shares have dropped previously three weeks as indicators of sticky inflation fanned fears that the Fed may pursue increased rates of interest for longer. The primary quarterly decline in company earnings since 2020 has additionally damped danger demand, and Wall Road market strategists together with Michael Wilson at Morgan Stanley have warned that equities may see deep declines over the subsequent few months.

Financial institution of America’s Hartnett reiterated his view that the S&P 500 may slide to three,800 factors by March 8 — implying declines of greater than 5% from its newest shut. The strategist’s name is underpinned by expectations that resilient development within the first half of the 12 months will coincide with increased rates of interest and result in a sharper financial slowdown within the second half.

In distinction to the final development, BofA non-public purchasers made the most important additions to shares in eight weeks.

Amongst areas, emerging-market inventory funds attracted inflows of $2.1 billion within the week, whereas US equities had redemptions for a 3rd straight week at $9 billion. Outflows additionally resumed from European funds. By type, US worth and small cap noticed additions, whereas cash left development and enormous cap funds. Power led sectoral inflows, and supplies and financials noticed the most important outflows.