Illustration: Aïda Amer/Axios

The historic inflow to money market funds from institutional asset managers finally paused last week and that could mean investors are starting to believe in equities again after steering clear of making major investments over the last two months.

What happened: Money market funds, which are effectively savings accounts, saw just $1.41 billion of inflows for the week ending May 21, data from the Investment Company Institute showed — and it was entirely from retail investors.

The big picture: Professional fund managers have moved more than $1 trillion into money markets since the week ending March 18, bringing total holdings to $4.8 trillion.

  • That's a record high and close to $1 trillion more than the record level prior to 2020, during the Great Recession.

What they're saying: “The extreme attractiveness of stocks over bonds, particularly as rates have plummeted back to near zero, can be the catalyst for the rotation into stocks, driving the market higher,” Savita Subramanian, Bank of America's head of U.S. equity and quantitative strategy, said in a recent note to clients.

By the numbers: Investment in stocks among BofA's clients has fallen by 3 percentage points to 57.1% while cash allocations have risen to nearly 14%, well above the historical average dating back to 2005, she noted.

  • The S&P 500′s dividend yield is more than three times the yield of the 10-year U.S. Treasury note — 1.95% vs. 0.66%, according to FactSet.

The bottom line: “As the economy enters what our economists forecast as the worst recession in the post war era, the market is telling us not to worry," Subramanian said. "And it is dangerous to ignore the market.”

Go deeper: Stock market has its best day since early April

Go deeper

How retail investors are beating the pros at their own game

Illustration: Sarah Grillo/Axios

Call it the Robinhood effect. In a tectonic shift that shows how the coronavirus pandemic has upended seemingly every part of our reality, millennials and Gen Z have started to abandon video games and sports betting in favor of a new craze: the stock market.

Why it matters: While many have wagged their fingers at what they see as overconfident and underprepared youngsters day trading on their smartphones, the stock market's new school — a collection of sports bettors, the newly unemployed, Reddit aficionados and eager young investors — is growing into a force on Wall Street.

Foreigners bought a record amount of Chinese local bonds in May

Illustration: Eniola Odetunde/Axios

The amount of foreign money flowing into onshore Chinese bonds more than doubled in May from its previous monthly total and the proportion of the bonds held by foreign investors rose to the highest level on record, Chinese government data showed.

What's happening: Ultra-low bond yields in the U.S., eurozone and other developed markets seem to be driving money to China, even as its yuan currency depreciates below 7-to-1 against the dollar.

Updated 10 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 3 p.m. ET: 11,143,945 — Total deaths: 527,681 — Total recoveries — 6,004,593Map.
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  3. States: Photos of America's pandemic July 4 ICU beds in Arizona's hot spot reach near capacity.
  4. Public health: U.S. coronavirus infections hit record highs for 3 straight days.
  5. Politics: Trump extends PPP application deadlineKimberly Guilfoyle tests positive.
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  8. 1 📽 thing: Drive-in movie theaters are making a comeback.