Global investors reinvested in stocks and bonds this week as they regained their appetite for risk, spurred by dovish comments by Federal Reserve Chairman Jerome Powell.

Equity funds generated cash inflows of $ 6.2 billion, their biggest figure in 11 weeks, said Bank of America Merrill Lynch strategists on Friday, citing EPFR data on cash flows. of the week preceding the 9th of January.

Some $ 7.2 billion was paid into bond funds, the largest in 39 weeks.

The BAML investor positioning indicator "Bull / Bear" fell to 1.8 last week, what strategists have called "the extreme territory of the bear", triggering a signal "d & #" 39 "purchase" for the shares.

"Initial skepticism about the size and duration of the rally … has quickly turned into a pursuit through emerging and US equities, but not from Europe," writes strategists from BAML, commenting on customer feedback after the signal.

The gauge has risen to 2.2, or "neutral" territory, this week.

In the United States, growth stocks and large-cap stocks generated the largest inflows with $ 2.1 billion and $ 1.8 billion, respectively, while $ 700 million evaporated from value stocks.

Powell's comments that the US central bank could be patient in approving any further rate hike caused relief for investors who feared that rate hikes would continue could be a mistake.

As another sign of healthy risk appetite, emerging market assets were appreciated by equity funds and bond funds, which earned $ 2.4 billion, while high-yield bond funds received $ 1.5 billion.

Europe remained unpopular with outflows of $ 100 million. European equity funds have experienced disbursements in 43 of the last 44 weeks.

In some sectors, investors earned $ 600 million in technology stocks and $ 1.5 billion in financial stocks. They also dropped $ 1.4 billion worth of premium bonds.

What could support risk recovery is the inflow of funds into credit funds, strategists said. This would indicate that the Fed "has short-circuited the vicious circle of rising credit spreads and growth," they wrote.

"Green shoots" from Asian or European macroeconomic data would also help support new gains, they added.

European stocks climbed to a high of one month on Friday and saw their fourth consecutive day of gains, which would be their longest winning streak since November.

© 2019 Thomson / Reuters. All rights reserved.