(Bloomberg) -- Investors are hoarding cash and hiding in US Treasuries as they dump equities amid fears that the US economy is headed for a recession.

Nearly $63 billion flowed into cash in the week through July 6, while global equity funds had redemptions of $4.6 billion, according to Bank of America Corp. note citing EPFR Global data. US stock funds still saw their second week of additions, while global bonds had their biggest inflows in 14 weeks at $2.4 billion thanks to the buying of Treasuries and government debt, Bank of America said. 

“The simple truth remains that the second half is most likely to be one of slowing growth and rising rates,” strategists led by Michael Hartnett wrote in the note, adding that the risk of a credit shock was high.

US stocks are attempting a recovery after their worst first-half since 1970 on optimism that inflation could be peaking. But the likes of Bank of America and Morgan Stanley strategists have warned that the slowdown in global economic growth could be worse than expected, adding pressure on the S&P 500 Index in the second half. Rate hike concerns are also back on the table with two of the Federal Reserve’s most hawkish policy makers backing another 75-basis points hike this month.

Hartnett said the S&P 500 was likely to be range-bound at 3,800-4,200 this summer rather than seeing a continued rebound. “Bear markets end with a recession or an event that causes Fed to reverse policy; we say bear market in summer hiatus, and bear ain’t over and Big Low has yet to be reached,” the strategist wrote.

By trading style among equities, US large caps and growth stocks saw inflows, while US value and small caps had outflows in the week. Health care and utilities led inflows among sectors, while materials and energy had the biggest outflows as commodities retreated.

“Summer narrative of second-half recession and 2023 Fed rate cuts, big rotation from inflation (commodities) to deflation (tech) assets,” Hartnett wrote. 

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