Money flowed out of the global equity fund again!
$S&P 500 Index(.SPX.US$ $Dow Jones Industrial Average(.DJI.US$ $NASDAQ 100 Index(.NDX.US$
Us strategists say investors are once again shunning global equities in favour of bonds. The bank pointed out that after a strong rebound in July, now is the right time to withdraw from US stocks.
Us strategists say investors are once again shunning global equities in favour of bonds. The bank pointed out that after a strong rebound in July, now is the right time to withdraw from US stocks.
Bank of America Corporation quoted EPFR global data as saying that global equity funds had outflows of $2.6 billion in the week ended August 3, compared with inflows last week for the first time in six weeks, of which US equity funds had outflows of $1.1 billion. Meanwhile, the global bond market saw inflows of about $12 billion, the highest level since November.
It is reported that in terms of style factors, US growth stocks and small-cap stocks have capital inflows, while large-cap stocks suffer the largest capital outflows; from an industry point of view, the consumer and financial sectors have the largest capital inflows, while the materials and real estate industries have suffered capital outflows.
Michael Hartnett, a strategist at Bank of America, has said that the recent stock market rally is more likely to be a bear market rally than a sustained rally. He reiterated that investors should "fade out of the stock market" when the S & P reaches 4200. According to the data, 4200 is only about 1.2 per cent higher than Thursday's close of 4151.94.
Michael Hartnett insists that the bottom of the S & P 500 will be below 3600, which means the index still has about 13 per cent room to fall. He expects the S & P to trade in a range of 3800-4200 until the Fed makes a decision at its next meeting in September.
U. S. stocks struggled to maintain their upward momentum in August. Us stocks rebounded strongly in July as companies performed better than expected during the second-quarter earnings season and the market bet that the Fed would slow the pace of rate hikes. The technology-heavy Nasdaq 100 index is up nearly 20% from its June low. In addition to US stocks, BofA's European market strategists have downgraded their view of European stocks to "negative". Strategists say macro forecasts show that European stock markets will fall 10 per cent by the end of the year. Liquidity data also showed that European equity funds had outflows of $3 billion this week, the 25th consecutive week of outflows.
A number of Wall Street banks are bearish on US stocks.
Not only Bank of America, but also Wall Street banks that have recently made bearish comments on US stocks abound. Goldman Sachs Group strategist, including Cecilia Mariotti, said on Aug. 4: "if there are no clear signs of a shift in macroeconomic momentum, a brief strong rebound may mean an increased risk of another decline rather than the end of a bear market."
Max Kettner, a strategist at HSBC and a staunch bearish on U. S. stocks this year, said on Thursday that he would "minimize his holdings of stocks." He expects the market rally to end badly this summer and suggests abandoning stocks and bonds and seeking refuge in cash at a time when economic growth risks are high. He believes that in the current environment, the "only preferred asset" is US dollar cash.
Bernstein strategists Sarah McCarthy and Mark Diver also said that with the outflow of equity funds, the performance decline cycle has only just begun. Although investors stopped buying stocks in the second quarter, equity funds still did not see a "huge" reversal of inflows of as much as $200 billion in the first quarter, they said. "We expect the stock market to fall again in the short term," they said bluntly. "
Dana D'Auria, co-chief investment officer of Envestnet, believes that the recent rally in the stock market represents a palliative rebound and that the stock market may not have hit bottom. She believes that the stock market rally after the Fed's interest rate meeting in July was "a bit excessive" and that the market overestimated the possibility of the Fed turning to a dovish position. She said bluntly: "some people think that we will slow down interest rate increases and start to cut interest rates in early 2023, which is unlikely. The Fed has room to continue to raise interest rates because the job market remains strong, giving the Fed the green light to continue to fight inflation.
Edward Abbott and Jonathan Stubbs, strategists at Berenberg, warned that the future decline in corporate earnings would pose a threat to the stock market. According to the model, corporate profits could fall 15 per cent year-on-year and 20 per cent year-on-year as profit margins come under pressure, they say. Valerie Gastaldy, a technical analyst at DayByDay, also said investors should take advantage of the opportunity to take profits because "from now on, the trend will be very uncertain", pointing out that the S & P 500 is at the level that attracts bears to sell again.
The article is reproduced from finance.sina.cn.
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