Last week, there was a general flow of investments across all asset classes, with China leading the way by attracting the third-largest inflow of equities in 2024, as revealed by Bank of America on Friday. So far this year, stock funds have received $700 billion in inflows, the second-highest ever. For the week ending on October 10, stock funds brought in $39.7 billion. Emerging markets saw a record inflow of $40.9 billion, with China contributing $39.1 billion, the largest in history. In contrast, Japan experienced its largest outflow on record at $8.8 billion, while India had its first outflow since June 2022, at $200 million. Tech funds also saw their largest inflow in four months, attracting $7.4 billion. Bond funds also saw significant inflows, totaling $17.5 billion, making it the 50th consecutive week of inflows for investment-grade (IG) bonds, which brought in $9.5 billion. High-yield (HY) bonds saw an addition of $400 million, marking their ninth straight week of inflows, while Treasury bonds attracted $4.5 billion in inflows, resuming after a brief pause. Municipal bonds extended their streak to 15 weeks with $1.1 billion in inflows, and emerging market debt attracted $1.2 billion for the fourth consecutive week. Treasury Inflation-Protected Securities (TIPS) experienced their largest outflow since December, at $1.3 billion, whereas bank loans saw their biggest inflow in five months, at $1.4 billion. Additionally, cash inflows were strong at $16.7 billion, with gold attracting $500 million in inflows, and cryptocurrencies receiving $300 million. BofA strategists noted that traders are actively investing in China stocks, while allocators remain doubtful about a major turning point, especially considering the upcoming U.S. election. The bank emphasized the importance of “buying any China dips” as policymakers signal the aggressive use of capital markets to boost domestic demand and investor sentiment. BofA also anticipates upward revisions to China’s GDP forecast and higher bond yields driving more investment into the country. Regarding politics, the bank highlighted the tight race between Donald Trump and Kamala Harris, with Trump holding a slight lead at 53% to Harris’ 47%. However, the bank pointed out that what matters more to Wall Street is the low and stable likelihood of a “sweep” by either party, with a mere 30% chance, indicating one party controlling both the presidency and Congress. This has alleviated investor concerns of potential inflationary pressures resulting from the election. Discussing investment trends, U.S. equity inflows rebounded with $2.7 billion, while Europe experienced a second consecutive week of outflows, losing $1 billion. Emerging market stocks continued to demonstrate strength, marking their 19th consecutive week of inflows.