New numbers show retail investors bought billions of dollars in equity funds last week, as fears over the Chinese AI app DeepSeek triggered major market volatility.
Data from Emerging Portfolio Fund Research (EPFR), Haver Analytics and Deutsche Bank shows traders specifically poured $6.5 billion in US technology sector funds in just seven days.
Adam Kobeissi, founder and editor-in-chief of The Kobeissi Letter, says the tech sector boom is part of an overall deluge of capital into equity funds at large.
“Total equity fund inflows reached ~$25 billion last week. Bullish sentiment is extremely strong right now…
In fact, bullish sentiment is so strong that a record 54% of financial assets are now allocated to US stocks. This is nearly DOUBLE levels seen in 2008 while debt investments have fallen to a record low 18%. Equity allocation is officially above the 2001 Dot-Com bubble peak.”
Demand for gold and Bitcoin ETFs is also strong, as President Trump takes action on tariffs.
Kobeissi says the market flows are a signal that more volatility is incoming.
“Positioning is at extremes as we begin another trade war. Currently, 41% of revenue in S&P 500 comes from outside of the US. This is the highest since 2013 and significantly above 2018-2019 levels in the last trade war.
Furthermore, most of the buying has been concentrated in technology stocks. 30% of US imports from China are in the computer and electronic category. Not to mention US chip exports to China and Singapore which are also in the spotlight. This market will be HIGHLY tradable.”
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