10.10.25 - Record levels with record inflows
The market saw record inflows into equities during the last weeks. A significant share of that money was recorded into technology-focused funds. According to the latest figures from Bank of America, equity funds recorded inflows of USD 26 billion last week alone, while the cumulative inflow into listed equity funds over the past three weeks reached USD 152 billion, the largest three-week inflow ever recorded.
The data also shows that the rally is driven by highly enthusiastic retail investors despite already stretched valuations and a cooling institutional appetite.
Markets: equities remain buoyant with first signs of nervousness
US indices continue to rise
Commodities: rally takes a pause after big gains - Gold gaining back the USD 4’000/oz level
Bond yields moving lower with US 10-year Treasury yield at 4.10%
US dollar loses ground after dead cat bounce
Volatility index (VIX) signals calm markets
My View: As highlighted in earlier posts, AI is driving a profound transformation, not only from a technological standpoint but also in investor behaviour.
The collective optimism, rapid reaction, and strong appetite for technology stocks have made retail investors the new market drivers, setting the tone for sentiment and short-term momentum.
However, when markets depend too heavily on sentiment, fragility increases. For me, this is a clear signal of rising risk and the mounting potential for a broader correction.
Should momentum turn, many of these highly leveraged retail portfolios could face forced liquidations, amplifying downside pressure once the crowd starts to exit.
In the ETFMandate portfolio, I continue to ride the commodity rally, maintaining my conviction that a correction in the technology sector could be imminent and may drag broader markets lower.
Momentum can persist longer than many expect. But retail-driven rallies often end as abruptly as they begin once sentiment shifts with a fall-out of new buyers.
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