Illustration: Aïda Amer/Axios

Asset managers at major U.S. investment firms are starting to get bullish with their clients, encouraging stock buying and trying not to get left behind right as the metrics on tech stocks rise back to highs not seen since the dot-com crash of 2000.

What's happening: Appetite for stocks is starting to return, but slowly as institutional money managers were overwhelmingly sitting on the sidelines in cash during April and May.

  • And money has flowed much more significantly to bonds than stocks over the past two months.

By the numbers: U.S. stock funds overall have seen net outflows in nine of the past 10 weeks, including $22.9 billion of outflows for the week ended July 1, the last week for which data are available, according to the Investment Company Institute.

  • Bond funds, on the other hand, have seen inflows during each of those 10 weeks and generated $114.4 billion of inflows in just the last five.
  • For comparison, bond funds saw around $180 billion of total inflows for all of 2018.

Yes, but: The pendulum is swinging.

  • Last week, net long U.S. equity futures positioning rose for a third straight week to a three-month high, according to data from Deutsche Bank, which also noted that the call-to-put ratio — the percentage of bullish versus bearish bets on stock options — surged to the 94th percentile.
  • Deutsche's data also show inflows of $6.2 billion into equity funds last week, the first inflows in four weeks.
  • Bank of America's wealthy clients moved the most money into equities last week since November 2019.

Between the lines: While stocks overall have seen net outflows, tech sector funds have notched 13 straight weeks of positive fund flows, banking their largest quarter of inflows since the first quarter of 2000, according to data from Lipper Refinitiv.

What we're hearing: Markets are rationally being irrational, strategists at Bank of America said in a note to clients late last week, as "government and corporate bonds have been fixed ('nationalized') by central banks, so why would anyone expect markets to connect with macro, why should credit & stocks price rationally."

  • "2020 policy stimulus has been massive," they add, totaling $18.5 trillion — $10.5 trillion from government spending and $8 trillion from central banks, or 21% of the world's total GDP so far this year.
  • And it has been coordinated, with "monetary & fiscal, like two wheels of a bicycle, moving quickly in same direction working together."

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