That represents the biggest week of inflows since 2020 when investors were flocking to safety amid the onset of the COVID-19 pandemic.
"Cash rates are hiker and, with zero risk and volatility, cash and short duration debt look very attractive relative to equities. This is particularly so given that the US 10-year bond yield is well above the dividend yield," Oppenheimer wrote. The S&P 500 currently has a dividend yield of about 1.60%, less than half the US 10-Year Treasury yield of 3.45%.
And the risk-reward profile of the stock market isn't about to get better anytime soon, as Goldman expects flat earnings growth this year and just 5% earnings growth in 2024, meaning that valuations are likely to stay elevated unless a significant sell-off takes place. "If, as we expect, global economies avoid recessions this year and inflation continues to moderate, the fundamental backdrop for equities would look more attractive for longer-term investors. But valuations are not yet compelling enough to offer a great risk/reward, particularly given expectations for modest profit growth in the near term," Oppenheimer concluded.