By Investing.com — US equities recorded their largest single-day inflow in five months on Wednesday, as Donald Trump was announced the winner of the presidential election, with $20 billion flowing into the market, according to Bank of America (BofA).
US small caps also saw a record inflow since March, totaling $3.8 billion, while the financial sector received its largest daily inflow on record, $2.9 billion.
Over the week ending November 6, US equities continued to attract capital, with inflows for the fifth consecutive week, amassing $32.8 billion, whereas European and emerging markets saw outflows of $900 million and $1.1 billion, respectively.
The tech sector managed a weekly inflow of $500 million, though it has experienced its largest cumulative outflow since 2002 over the last four weeks.
According to BofA strategists led by Michael Hartnett, the period from the US election through Inauguration Day presents what he describes as “a risk-on window of opportunity” for US stocks.
Hartnett suggests that investors favor sectors expected to benefit from potential Trump-era policies, including financials, REITs, and small caps, with an emphasis on those less exposed to long-duration debt risks.
Moreover, strategists also urge investors to “buy international stocks…as China eases fiscal policy & ECB cuts rates aggressively in anticipation of America First tariffs.”
Specifically, they see compelling opportunities in China’s internet sector, EU cyclicals, and oversold emerging markets (EMs) “that are structural beneficiaries of deglobalization.”
By style, US large caps gained $24.2 billion for the week through Nov.6, small caps $4.5 billion, while growth stocks saw outflows of $600 million, and value stocks lost $1.9 billion.
By sector, financials led with $2.5 billion, whereas health care, consumer, and REITs faced outflows of $700 million, $1 billion, and $1.1 billion, respectively.
Bonds continued to attract capital for the 46th consecutive week, with total inflows reaching $14.5 billion.