US Investors Running Out of Cash

The US stock market has a cash problem. As in, investors are running out of it, and the shortage could threaten the 8 1/2-year equity bull market. It’s a new reality facing investors of all types, Yahoo Finance reported. While money market assets make up a record-low 17% of long-term funds, the cash balance of equity mutual funds also sits at an all-time low of 3.3%, according to data compiled by INTL FCStone. And the firm doesn’t mince words when discussing the increasingly dire situation. “A decade of financial repression has turned cash into trash,” the firm’s macro strategist Vincent Deluard wrote in a recent client note. “There are a lot of fully-invested bears out there. There is not much sidelines cash left to push stocks higher.” Some of the market’s very biggest lenders have also highlighted dwindling investor capital. On Morgan Stanley’s earnings call on October 17, chief financial officer Jonathan Pruzan said that “we’ve seen cash in our clients’ accounts at its lowest level.”