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Recession fears pervade markets, gun-safety legislation and a dark mood for China tech.Recession fearsGlobal equity funds saw their biggest [View in browser]( [Bloomberg]( Recession fears pervade markets, gun-safety legislation and a dark mood for China tech. Recession fears Global equity funds saw their biggest [outflows]( in nine weeks as investors piled into cash on concern the US economy may be headed for a recession. US equities had their first outflow in seven weeks, at $17.4 billion, according to a Bank of America Corp. report. Meanwhile, a Goldman Sachs Group Inc. index of [defensive stocks]( has climbed to more than an 18-month high relative to the MSCI AC World Index as fears of a global recession outweigh concern over sky-high inflation. Oil is set for a [weekly loss]( amid a broad selloff in [commodity markets.]( Gun safety The US Senate voted 65-33 to approve bipartisan [gun-safety legislation]( that is hailed as the biggest breakthrough on the issue in three decades. The vote came the same day the [Supreme Court struck down]( a New York law that required people to show a special need to carry a handgun in public, ruling for the first time that the Second Amendment protects gun rights outside the home. Meanwhile, the hearing by the House panel investigating the [Capitol insurrection]( heard then-President Donald Trump spent the weeks before Jan. 6, 2021, flailing for ways to get the Justice Department to bolster false claims of election fraud. Once bitten, twice shy Signs that Beijing's crackdown on tech companies [is easing]( meant [investor interest]( in the sector has risen in recent weeks. However, on the ground in China, the mood is much darker. Bloomberg talked to executives, entrepreneurs and venture capital investors in the country who outlined an ongoing sense of [paranoia and paralysis]( in the industry as the regulatory regime remains unclear. Elsewhere in chastened bullishness this morning, a hack of Harmony's Horizon bridge saw about [$100 million of cryptocurrency stolen]( from the cross-chain transfer system. Harmony’s native ONE token dropped 13% over the past 24 hours, according to CoinGecko. Stocks extend gain Stocks in Europe extended opening [gains](with the Euro Stoxx 50 rising as much as 1.3% as of 5:30 New York time. S&P 500 futures were up 0.7%. Bonds completed a round trip with bund, Treasury and gilts erasing early gains. The US 10-year yield was around 3.09%. Dollar weakness resumed with Bloomberg's dollar spot index returning toward the worst levels for the week. Crude futures broke out of a subdued Asian trading range with WTI trading above $105. Spot gold held steady near $1,825/oz. Bitcoin drifted below $21,000. Coming up... Today's data includes the final June University of Michigan Sentiment release and May's new home sales data at 10 a.m. The Baker Hughes Rig Count is due at 1 p.m. Fed's James Bullard will discuss central banks and inflation at 7:30 a.m. and Mary Daly will be interviewed on Fox Business News at 1:15 p.m. before speaking at a conference at 4 p.m. We are also scheduled to hear from BOE policymakers Huw Pill and Jonathan Haskel as well as ECB's Mario Centeno and Luis de Guindos throughout the session. CarMax Inc. and Carnival Corp. are among the companies scheduled to report earnings. What we've been reading Here's what caught our eye over the last 24 hours. - S&P 500 [could fall]( another 24%. - [Covid vaccines]( prevented 20 million deaths. - US to escalate Mexico [free-trade claim.]( - [Housing correction]( coming. - Boris Johnson’s [Tory chair]( quits. - EU braces for[tough winter](. - Searching for [Rihanna statue.]( And finally, here’s what Katie's interested in this morning TINA (there is no alternative) has been a catchy and accurate shorthand to describe the prevailing investment philosophy over much of the last decade — the idea that ultra-low rates have pushed yield-starved investors into riskier assets, such as stocks. But there’s a new woman’s name to get acquainted with. “We call it PATTY — pay attention to the yield,” RiverFront Investment Group global fixed income CIO Kevin Nicholson said in a Bloomberg Television interview this week. “As fixed-income yields have gone up, that has lead us to start to look at fixed-income a little bit more.” I don’t know why we keep gendering market mantras, but it’s a salient point as the global bond selloff pushes yields to [attractive places]( relative to stocks. A version of the Fed model applied to corporate bonds illustrates that point nicely. The S&P 500’s earnings yield is around 5.3% at the moment, just 55 basis points above the average US investment-grade yield of 4.7%. That’s close to the narrowest gap since 2010. The same goes for high-yield bonds, which are a more fitting comparison to equities since both are risk assets, according to Northern Trust’s Katie Nixon. US junk is yielding 8.6% on average, the loftiest premium since early 2016. “Adjusting that 8 to 9% yield for risk, it does look pretty attractive relative to the much higher-risk return on an equity,” Nixon, chief investment officer at Northern Trust, said via phone. “You’re at least getting a yield, and that gives you the luxury to stay the course. And right now, that yield component is pretty high.” Of course, the wild card for every asset class is the Fed. Even after the most aggressive rate hike since 1994, it remains to be seen whether the central bank is able to get a grip on inflation in an orderly manner. But for the time being, it looks like PATTY is winning the popularity contest. Follow Bloomberg's Katie Greifeld on Twitter at [@kgreifeld]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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