Money-market fund assets rise to record, as 'investors love cash' even as stocks climb in 2024

By Christine Idzelis

The pile of cash in money-market funds remains a 'potential source' of capital for the U.S. stock market, according to BofA Global Research

Assets in money-market funds rose to a record $6.111 trillion last week, with investors sitting on massive amounts of cash on the sidelines of the U.S. stock market, according to BofA Global Research.

"Investors love cash," said Stephen Suttmeier, technical research strategist at BofA, in a note Tuesday. That "mountain of money" remains a "potential source of funds for U.S. equities," he noted.

"Retail money-market fund levels also hit a record high of $2.429 trillion last week," said Suttmeier, while "institutional money-fund levels are near their mid-March record high of $3.718 trillion."

Investors have piled into money-market funds that are yielding around 5% as the Federal Reserve has kept interest rates elevated in an effort to bring down inflation. Meanwhile, the U.S. stock market has climbed this year as many traders anticipate that the Fed will begin cutting rates in 2024.

So far this year, the S&P 500 SPX is up 8.7% based on Tuesday afternoon trading levels, FactSet data show, at last check.

But the U.S. stock market was trading down on Tuesday, as investors await March inflation data in the form of the consumer-price index, which is due out Wednesday before Wall Street's opening bell. The Dow Jones Industrial Average DJIA was off 0.4% in afternoon trading, while the S&P 500 was losing 0.4% and the technology-heavy Nasdaq Composite COMP was slipping 0.2%, according to FactSet data, at last check.

-Christine Idzelis

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04-09-24 1503ET

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