BofA analysts told investors in their flow show note Friday that U.S. stocks momentum is at its strongest since October 2022.
Analysts revealed that individual investor sentiment is at 19-month highs, "melting up with frothy stocks as investors chase the bull."
"We have missed surge in stocks but capitulation likely complete before July 20-30th FOMC/BoJ/ECB + Q2 EPS," the analysts wrote. "Upside risk = China stimulus, downside risk BoJ tightens & hawkish Fed-speak."
They said $22.3 billion went into stocks last week, with $6.7B to bonds, $0.5B out of gold, and a big $37.9B outflow from cash, representing the first outflow in eight weeks.
Meanwhile, there were $38B in inflows into stocks in the past 3 weeks, representing the "strongest momentum since Oct '22," while tech has gained $19B in inflows in the past eight weeks, representing the strongest momentum since March 2023.
Analysts also noted that bears, such as BofA themselves, have been wrong in the first half of this year as neither a Q1 EPS/H2 GDP recession happened, while there was no credit crunch and liquidity was routed into the new secular growth theme of AI.