Money flows push stocks higher

The S&P 500 rose 2.7 percent last week, ending the week at a record high.

The rally in stocks has been maintained amid large inflows into equity funds. According to data from BofA, equity funds have attracted more than half a trillion dollars in the past five months, exceeding inflows recorded over the previous 12 years.

“Sentiment is in very worrisome territory as is valuation, yet money flows continue to push indices higher,” said Tobias Levkovich, Citi’s chief US equity strategist.

Analysts mostly remain bullish, although some are becoming cautious.

“We remain optimistic but there’s less upside left in our view,” said Emmanuel Cau, head of European equity strategy at Barclays.

“We are risk-on, but we haven’t put our foot down on the accelerator because of valuations in some parts of the market,” said Fahad Kamal, chief investment officer at Kleinwort Hambros.