This week's sell-off stemmed from the upside-down of the partial yield curve on U.S. Treasuries, which had been a reliable indicator of the impending recession.
After Canada arrested China as Chief Financial Officer at the request of the United States, investors predicted that Sino-US relations would deteriorate and market selling would intensify, leading to a spiral decline.
Bank of America Merrill Lynch cited EPFR data to show that this anxiety prompted investors to withdraw $5.2 billion from stock funds and $8.1 billion from bond funds.
"The market has begun to reflect recession factors, but policy makers have not taken recession into account," said Bank of America Merrill Lynch strategist.
Among the components of the outflow of stock funds, the inflows of listed trading funds (ETF) and mutual funds are 5.3 billion US dollars and 10.5 billion US dollars respectively.
But investors continued to return to emerging market stocks, with inflows of $2.7 billion, the eighth consecutive week.
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