Global equity funds extend inflow streak to 12 weeks on cooling inflation

Global equity funds drew net purchases of $18.62 billion during the week ended August 12, extending a streak of inflows to 12 consecutive weeks as a strong corporate earnings season and cooling inflation data eased investor fears of further Federal Reserve tightening, according to LSEG Lipper data cited by Reuters.reuters

Earnings and Inflation Fuel Risk Appetite

The week's haul edged past the prior week's $17.27 billion in net purchases, though it remained well below the $21.15 billion recorded a week earlier for the 11th-straight inflow period. The MSCI All-Country World Equity Index ↘ 0.12% rose 2.85%, lifted by results from AI-exposed names such as Caterpillar ↗ 0.23% and Palantir ↘ 2.78%.devdiscourse+1

The rally accelerated on Thursday, August 13, after the Bureau of Labor Statistics reported that the Producer Price Index for final demand was unchanged in July on a monthly basis, with the year-over-year rate easing to 4.7% — below market expectations. The cooler reading pulled the 10-year Treasury yield down four basis points and trimmed implied odds of a September rate hike.hdfcsky+2

The S&P 500 responded by climbing 0.65% to close at a record 7,798.99, eclipsing its previous record set the prior Friday, according to the Detroit News, citing Reuters data. The Nasdaq Composite gained roughly 0.9% on the session.detroitnews

Regional Flows and Sector Trends

European equity funds led the regional breakdown, pulling in $13.52 billion — their largest weekly intake since July 8. U.S. equity funds attracted $2.58 billion and Asian equity funds added $4.13 billion. Emerging-market equity funds extended their own streak, recording a fifth straight week of inflows at $3.45 billion.reuters

Despite broad risk-on sentiment, sector flows were uneven. Technology funds saw withdrawals, while gold and consumer staples funds attracted fresh capital. Bond and money market funds also drew renewed interest as investors hedged against lingering rate uncertainty.devdiscourse

Oil and Gold Add to the Picture

Brent crude fell more than 2% to around $87 a barrel after a surprise 17.4-million-barrel U.S. inventory build and demand-growth downgrades from OPEC and the IEA outweighed supply risks tied to tensions in the Strait of Hormuz. Spot gold pulled back from a two-month intraday high near $4,450 an ounce, retreating over 1% even as the dollar index slipped below 100.00 on the softer inflation print.hdfcsky

Cleveland Fed President Beth Hammack reiterated her preference for a rate hike, but markets appeared to look past the hawkish voice — at least for now.hdfcsky