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In the week to Wednesday, outflows from stocks and bonds were $3.4 billion and $9.1 billion, respectively.
“Flows were ‘risk-off’ heading into FOMC…big inflow to Treasuries ($6.0bn), big outflow from TIPS ($3.2bn), big outflow IG bonds ($7.3bn), largest REIT outflow ever ($2.2bn), big outflow financials ($1.6bn), 4-week average of flows to stocks turning most negative since May ’20,” Hartnett said in a client note.
The strategist added that the world saw 19 bear markets in the past 140 years with an average price decline of 37.3% over the course of over 9 months.
“Past performance no guide to future performance, but if it were, today’s bear market ends Oct 19th ’22 with S&P500 at 3000, Nasdaq at 10000; good news is many stocks already there, e.g. 49% of Nasdaq >50% below their 52-week highs, 58% of Nasdaq >37.3% down, and 77% of index in bear market, i.e. down >20%; good news is bear markets are quicker than bull markets,” Hartnett added.
Bank of America’s Bull & Bear Indicator remains flat at 2.1 with Hartnett noting that $1.1 trillion of inflow to stocks since January 2021 had an average entry point of 4274 on the S&P 500.
“Yes all are bearish, but paralysis rather than panic best describes investor positioning YTD,” Hartnett concluded.
By Senad Karaahmetovic
