Money-Market Fund Assets & Small Bank Deposits Surge To Record Highs... As Stocks Soar

For the third week in a row (and 9th week in the last 10), money-market funds saw inflows (+$11.3BN), pushing total AUM to a new record high ($6.474TN), even as stocks surged to new record highs...

Source: Bloomberg

...and also for the third week in a row, US banks saw total bank deposits (seasonally adjusted) rise (by $53.2BN), well above pre-SVB levels...

Source: Bloomberg

On a non-seasonally-adjusted basis, deposits soared by a huge $123.9BN to the highest since Jan 2023 (before the SVB crisis)...

Source: Bloomberg

Perhaps even more stunning, excluding foreign deposits, domestic US banks saw a massive $99.2BN deposit inflow (SA) in the week-ending Oct 2nd - the biggest weekly deposits inflow since May 2021. On an NSA basis, domestic deposits rose $178BN...

Source: Bloomberg

Large banks saw $55.5BN of inflows (SA) and/or $123.3BN inflows (NSA). Small banks saw $43.7BN of deposits inflows and/or $54.7BN inflows (NSA). This is a new record high for Small Bank deposits...

Source: Bloomberg

On the other side of the ledger, large banks saw loan volumes shrink by $1.9BN while small banks saw loan volumes rise by $4.3BN...

Source: Bloomberg

At the same time, banks are unwinding (can't roll because the facility is closed) their loans from The Fed's bank bailout facility...

Source: Bloomberg

Bank reserves at The Fed ticked up modestly last week but remain drastically decoupled from their historically tight relationship with US equity market capitalization...

Source: Bloomberg

Finally, as we detailed here, below the surface of soaring bank stocks, something serious is going on in the financial system plumbing.