(BofA-ML) Equity Client Flow Trends - Clients back to selling US stocks

* Break in selling streak was short-lived
Last week, during which the S&P 500 was down 0.2%, BofAML clients returned to selling US stocks, following a week of net buying. Previously, clients had sold stocks for 19 consecutive weeks, the longest selling streak in our data history. Net sales of $3.8bn last week were the largest since mid-April, with selling led by institutional clients (the biggest sellers during the majority of the selling streak—see Chart 3). Private clients were also net sellers; this group has sold stocks for the last eighteen consecutive weeks, though in lesser magnitude vs. institutional clients. Meanwhile, hedge funds were net buyers last week after selling stocks in the prior two weeks. Small, mid and large caps all saw outflows. Buybacks by our corporate clients picked up slightly last week, but still remain weak, with
the four-week average tracking its lowest since January 2015.

* Broad-based single stock selling; only ETFs saw inflows
Clients sold single stocks across all ten sectors last week. Only ETFs saw net buying, as they have for the past five weeks. Net sales were the most sizeable in Health Care—which has seen among the largest and most consistent sales this year amid uncertainty over the US election and a positioning unwind—and Financials, which was the worst-performing sector last week as expectations for the next rate hike were further pushed out. Year-todate, clients have been cumulative net sellers of single stocks in all sectors except Telecom.

* Other notable flows: Big mid-cap outflows
• Energy, Health Care and Utilities saw net selling by institutional clients, hedge funds and private clients alike last week. No sector saw net buying by all three groups.
• Net sales of mid-caps last week were notably the fifth-largest in our data history (since ’08), and the largest in three months.
• Pension fund clients were net buyers of US stocks last week, following a week of net selling. Net buying was driven by ETFs and Tech stocks; Health Care stocks saw the biggest net sales. This group remains a net buyer of stocks year-to-date, which was true in 2015 and 2014 as well. See Pension fund flows for details.

(BofA-ML) Global Fund Manager : No Bulls on Bear Mountain

No Bulls on Bear Mountain

* FMS bottom line
Record high corporate bond and (US) stock prices…yet June FMS shows investors have a mountain of cash…negative summer “events” (e.g. BREXIT) could thus quickly become tradable buying opportunities.

* Bear mountain
June FMS big bear signals: cash level of 5.7% (up from 5.5%) = highest since Nov’01; BofAML Risk & Liquidity Index at four-year low; lowest global equity allocation vs. cash/bonds/commodities since Jul'12; most crowded FMS June trade = “long quality”.

* It ain’t the economy, stupid…
…FMS risk aversion consistent with recession yet global growth and profit expectations at six-month high, global inflation expectations at one-year high.

* BREXIT the biggest FMS “tail risk”…
…FMS shows large short in sterling and FTSE (Exhibit 1); contrarians note stubborn longs in Eurozone, banks, tech most vulnerable to “BREXIT”, while unloved UK assets, resources most upside to a “BREMAIN” vote.

* Wanted: policy panic
Potential combo of “summer of shocks” and “Quantitative Failure” = high cash; hopes for new radical policy stimulus low…record FMS reading for fiscal policy “too restrictive” and 62% say no “helicopter money” next 12 months.

* June FMS Contrarian Trades
Sustained risk upside unlikely without sustained EPS growth…but long GBP, long stocksshort cash, long US-short Eurozone, long discretionary-short healthcare, long resourcesshort REITs = trading opportunities should policy makers react to market volatility.

(BofA-ML) European Fund Manager Survey - Cash kings prefer Europe

Cash kings prefer Europe

* Low risk appetite across regions and sectors
Globally, sentiment remains weak: global asset allocators are holding the highest average cash balance (5.7%) since Nov’ 01, while equity allocations have dropped to 4- year-lows. Cash allocations of European fund managers also remain elevated. Within equities, low conviction is also evident in regional and sector preferences.

* But consensus still pro-Europe
Regional allocations show Europe remains the most-preferred region (net 26% overweight), despite converging from extremes. Relative positive views are driven by growth optimism and the belief that ECB will stay the course of max-easing. Positioning implies that fund managers are hoping for mean-reversion on the European vs US equity market trade, which has made 60-year lows. However, the European Style Cycle continues to argue for staying out of Europe.

* UK stocks better placed for worse outcome
BREXIT is the biggest ‘tail risk’ by far, keeping the UK as the most underweighted equity market globally, and Sterling appearing the most undervalued it has been in the history of the survey. In case of an exit, UK large cap stocks should be relative winners given their higher Quality characteristics and low domestic exposure.

* Sector conviction too low to generate contrarian trades
This month sees no European sectors with extreme overweights (>30% net overweight) or underweights (<40% net UW), hence none of our contrarian signals are triggered. Broadly speaking, longs are focused on defensive themes with Telecoms, Healthcare, and Food & Bev most overweight. Banks remain the least-preferred.

>>> Street pre-market indications

CS
Ashtead +1-2% PBT beat, operationally company fine, share buyback annc'd
Crest Nichol M/P Numbers look fine first glance, co remains confident for FY
Danone +1-2% Co confirms 2016 sales. Sees solid improvement in 2016
Direct line unch received approval for use of its partial internal model
Firstgroup +1-2% Revs light, PBT better, commentary reads well
Gam Holding -10% Effectively warning ahead of 1H16 results, PBT down 50%
Gerry Weber M/P H1 sales inline, for FY rev €890-920m (cons at €905m)
Go Ahead -5% GTR looks worse, facing challenging environment
Halma M/P Headline no's 1% beat, stock has been great performer
Miners M/P Iron Ore & Steel have given up all of yday's gains and more
Novo Nord -1-2% Novo’s Victoza Cuts Heart Complications 13% in Diabetics
Oils -1% Brent is still stuck in and around the $50 mark
Premier Farn +5-8% Daetwyler buys PFL in recommended cash offer. 165p/shr
Ted Baker unch Rev +11.9% in the 19 weeks to June 11, outlook solid
MF
*DANONE-Lifts targets for Op Margin in 2016 Confirms Sales........+1%
*NOVO NORDISK-Victoza reduced CV risk by 13% in Leader Study......+1%
*PREM FARNELL-Daetwyler to buy Farnell for CHF1.09b(51% prem).....+47%
*GAM-Pft warning,Pft before tax & after tax in H1 down 50%........-7%
*ABENGOA-Green Plains to buy Abengoa's Ethanol Mills for $200m....+0.5%
*VINCI-Credit Agricole,Ardian 2 buy Vinci's stake in Indigo.......+0.5%
*AIR FRANCE-Pilots to decide in coming days on more strikes.......-0.5%
*NOVARTIS-Gilenya can trigger PML which destroys the brain........-0.5%
*KUKA-Midea satisfied with 49% of Kuka says Handelsblatt..........-0.5%
*G/WEBER-Sales 230m(225),Ebitda 15.4m(16.3),Ebit 4.5m(4.3)........-1%
*ADP-Paris Airports traffic +1.4%,Passengers 8.55mln..............+0.5%
*AIRBUS-1st delivery of A400M with tactical cap-not confirmed.....U/C
Investec
UK
* ASHTEAD-FY.#'s ahead of fcast.End markets remain strong.£200m buy back..+2-3%
* CREST NICHOLS-H1.Rev +22% (£408.1m)Re-iterates FY16 guidance..............+1%
* FIRST GRP-FY.Rev sml miss,EBITDA i/l,EPS slightly ahead.o'look inline.....+2%
* GO AHEAD GRP-PreClose.WARNING.GTR Franchise margins weaker than exp's...-5-7%
* HALMA-FY.#'s slightly ahead.Current yr in line with exp's.................+1%
* PREMIER FARNELL-Daetwyler agrees 165p/sh cash offer......................+46%
* TED BAKER-Update. Sales +11%, margins lin line.On track to meet exp's.....+1%

>>> What to look at today - 14th of June 2016

Dow -0.74% S&P-0,84% Nasdaq-0.91% Russell-1.14% VIX 20.99 +23.3%
US Market Closed lower today. Eco events this week (policy meetings at the Federal Reserve and Bank of Japan) and Brexit next week continue to weight on sentiment. IMF Comments on China's corporate debt levels. Rebound in oil helped mkt to rebound from lows but it was short lived, WTI crude ended its day lower by 0.4% ($48.88/bbl; -$0.18), materials (-1.3%), technology (-1.1%), and industrials (-0.7%) showing the largest losses. AAPL -1.6% MSFT-2.5%, FB-2.3% on Citron Report. Volatilitu should continue to trade higher ahead of The Federal Reserve today and Wednesday while the Bank of Japan will meet June 15 and 16. Furthermore, voting in the "Brexit" referendum will conclude on June 23. Volume were in line with average at 813mil shares. US After Hours NXPI+1.6%, KMPH -32% after receiving a complete response letter from the FDA; RVNC -22% after trial misses primary endpoints, bidu-5.2% CUT q2 Rev, IMGN -11% on CB issue(23% of mkt cap). Asian equity markets continued to move lower, echoing decline in US indices. GBP/USD has fallen below $1.42 - nearly a 2-month low - with a thrust to the downside in today's session after the latest YouGov Times poll showing 39% voting in favor of remaining and 46% to leave. Sun newspaper became the first major publication with a recommendation of casting off EU - sentiment shared by long-time EU sceptic Ambrose Evans Pritchard.

Nikkei -1.21% Hang Seng -0.08% CSI +0.22% Shanghai +0.14%

Eur$ 1.1283 CNH 6.5980 CNY 6.5885 JPY 105.91 GBP 1.4163 CHF 0.9640 RUB 65.6915 WTI$ 48.42 -0.94%

S&P +0.02% EuroStoxx-0.80% Dax-0.73% SMI -0.85%

Macro :
- Buffett Seeks to Buy German Cos With ~EU50m Profit: Handelsblatt
- Four Polls Put U.K. on Course to Leave EU as ‘Sun’ Backs Brexit
- Renewed speculation that EU seen extending sanctions on Russia by another six months next week

Keep an eye on :
- ABG SM : Abengoa receives combined $350m offers for US ethanol facilities; seeks court approval for auctions-WSJ
- ADP FP : ADP Paris Airport Traffic Rises 1.4% in May to 8.55m Passengers
- AF FP : Air France Pilots to Decide on More Strikes in Coming Days: AFP
- AAPL US : Apple Opens Siri, Maps to Developers, Redesigns Music Service
- AAPL US : Apple Moves Toward Direct Competition With PayPal: Piper
- AVV LN : Schneider/Aveva Bid Doesn’t Say What Changed, Why Now, Citi Says
- CAST SS : Castellum to Invest Up to SEK10b in New Space Next 3 Years: DI
- BN FP : Danone Forecasts Higher Profitability This Year on Cost Control
- DBHN GY : Deutsche Bahn 1Q Profit Said to Fall by EU42m: Handelsblatt
- ERICB SS : Ericsson Said to Lay Off 3,000-4,000 Employees This Summer: SVD
- FER SM : *FERROVIAL: TALKS TO BUY PERU PIPELINE FOR EU2.4B: CONFIDENCIAL
- GAM SW : GAM Holding 1H Pretax Down 50% Due to Fall in Performance Fees
- GWI1 GY : Gerry Weber 2Q Revenue Beats, Ebitda Misses; Sticks to Outlook
- MEO GY : Karstadt Raises Sales Forecast for Year, Bild Reports
- NOVO DC : Novo Nordisk’s LEADER Data Solid, ‘Failed to Impress:’ Jefferies
- PFL LN : Datwyler Offers to Buy Premier Farnell for 165p Per Share
- PUB FP : Cheil Worldwide 030000.KR +3.1% (shareholder talks end)
- RCS IM : RCS public offer may receive improved public offer from Cairo Communication on 17 June - Milano Finanza
- SU FP : Schneider/Aveva Bid Doesn’t Say What Changed, Why Now, Citi Says
- GLE FP : SocGen’s Oudea Wants Basel Rules on Ecofin Agenda: Echos
- VCH SW : Charles Voegele to Apply for Judicial Reorganization in Belgium
- DG FP : Credit Agricole, Ardian to Buy Vinci’s 24.6% Stake in Indigo
- ZBH US : Zimmer Biomet Holders KKR, Goldman, TPG to Offer 11.1m Shares

>>> Europe : Brokers Upgrades & Downgrades - 14th of June 2016

>>> Up
*CARREFOUR RAISED TO BUY VS ADD AT ALPHAVALUE
*CENTRICA RAISED TO BUY VS SELL AT UBS
*EVONIK RAISED TO OVERWEIGHT VS EQUAL WEIGHT AT MORGAN STANLEY
*PUMA SE RAISED TO ’HOLD’ AT BAADER-HELVEA
*SES RAISED TO EQUAL WEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*SUEZ RAISED TO NEUTRAL VS SELL AT CITI

>>> Down
*AVEVA CUT TO HOLD VS BUY AT BERENBERG
*CREDIT SUISSE CUT TO ’MARKET PERFORM’ AT KEEFE BRUYETTE
*DEUTSCHE LUFTHANSA CUT TO REDUCE AT KEPLER CHEUVREUX
*WACKER CHEMIE CUT TO EQUAL WEIGHT FROM OVERWEIGHT AT MORGAN STANLEY

>>> PT Change


>>> Initiation
*ACCELL RATED NEW BUY AT ING; PT AT EU21.25
*BANCO POPULAR RESUMED AT EQUAL WEIGHT AT MORGAN STANLEY
*BOLIDEN REINSTATED WITH SELL AT GOLDMAN, PT SEK160
*DEUTSCHE PFANDBRIEFBANK RATED NEW BUY AT BANKHAUS LAMPE PT EU13
*ESI GROUP SA RATED NEW BUY AT BERENBERG, PT EU36
*MONDI RATED NEW OVERWEIGHT AT JPMORGAN

>>> Call
>> Stock
*HANNOVER RUECK ADDED TO BANKHAUS LAMPE ALPHA LIST
*MTU AERO ENGINES REMOVED FROM BANKHAUS LAMPE ALPHA LIST

>>> Asian Update

Asian Mid-session Market Update: Brexit worries and slowing China continue to weigh on sentiment

***Economic Data***
- (AU) AUSTRALIA MAY NAB BUSINESS CONFIDENCE: 3 V 5 PRIOR; CONDITIONS: 10 V 10 PRIOR
- (AU) AUSTRALIA APR CREDIT CARD BALANCES: A$51.8B V A$51.8B PRIOR; CREDIT CARD PURCHASES: A$23.5B V A$25.B PRIOR
- (NZ) New Zealand May Food Prices M/M: -0.5% v +0.3% prior

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -1.4%, S&P/ASX -2.0%, Kospi -0.4%, Shanghai Composite -0.3%, Hang Seng -0.3%, Sep S&P500 flat at 2,070

***Commodities/Fixed Income***
- Aug gold -0.3% at $1,283/oz, Jul crude oil -1.1% at $48.34/brl, Jul copper % at $2./lb
- GLD: SPDR Gold Trust ETF daily holdings rise 2.4 tonnes to 896.3 tonnes; highest since Oct 2013
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5791 V 6.5805 PRIOR
- (CN) PBOC to inject CNY75B in 7-day reverse repos
- JGB: BOJ skips today's regular JGB buying operations - financial press
- (AU) Australia MoF (AOFM) sells A$150M in 2% 2035 Indexed bonds; avg yields 0.6922%; bid-to-cover 3.04x

***Market Focal Points/FX***
- Asian equity markets continued to move lower, echoing decline in US indices, as investors await high-profile BOJ and FOMC policy meetings this week. Vote on Brexit and renewed momentum behind the Leave camp is also weighing heavily on overall sentiment as well as on UK currency. GBP/USD has fallen below $1.42 - nearly a 2-month low - with a thrust to the downside in today's session after the latest YouGov Times poll showing 39% voting in favor of remaining and 46% to leave. Sun newspaper became the first major publication with a recommendation of casting off EU - sentiment shared by long-time EU sceptic Ambrose Evans Pritchard.

- Selling in China is somewhat more benign, though traders are still processing yesterday's disappointing retail and fixed investment data while awaiting money supply and new lending figures. Economists with ANZ warned that China may miss 2016 GDP target of 6.5% due to slowing industrial output growth, while Goldman Sachs warned that the property market is expected to reach a point of downward inflection in 6-9 months. Closely tracked power consumption data out of the NDRC did provide some welcome news, rising 2.1% y/y v 1.9% in April.

- Notable economic calendar releases were limited to Australia's NAB business sentiment showing a mixed-to-negative print. NAB chief economist remarked that "services continue to lead the way while manufacturing has pulled back and mining (and related sectors) still look weak", adding that since the inflation indicators in the survey have picked up this month, RBA will likely keep policy on hold for the foreseeable future. AUD/USD traded in a narrow 25pip range just below the $0.74 handle.

- Selling in USD/JPY pair has persisted, with traders piercing decisively below the 106 handle late in the session. Additional policy stimulus by the BOJ is still the preferred outcome for a minority of analysts, though Japan cabinet officials continue to resort to tough talk on currency volatility. Econ Min Ishihara said the govt is closely watching market moves and the historic low long term interest rates, while Fin Min Aso added that FX stability is extremely critical to the economy and that policy action may be needed to curb speculative moves in FX.

***Equities***
US equities / ADRs:
- NXPI: To divest its Standard Products business to a consortium of financial investors consisting of Beijing Jianguang Asset Management and White Road Capital for $2.75B; +1.6% afterhours
- BIDU: Cuts Q2 Rev $2.81-2.82B v $2.88Be (prior $3.12-3.19B); -5.2% afterhours
- IMGN: Announces proposed $100M offering of convertible senior notes due 2021 (23% of market cap); -11.1% afterhours
- RVNC: Reports results for RT001 topical Phase 3 trial for lateral canthal lines; did not achieve co-primary and other endpoints; -24.2% afterhours
- KMPH: FDA issues complete response letter for Apadaz New Drug Application; -30.1% afterhours

Notable movers by sector:
- Consumer discretionary: Cheil Worldwide 030000.KR +3.1% (shareholder talks end)
- Financials: China Resources Land 1109.HK -0.6% (May result); Onevue Holdings OVH.AU +2.3% (merger)
- Industrials: Hanjin Shipping Co 117930.KR +6.0%, Hyundai Merchant 011200.KR +2.4% (possible merger); NTN Corp 6472.JP -1.6% (expects to raise capex)
- Technology: Mesoblast MSB.AU -28.4% (update on Global Heart Failure Program)
- Materials: Regis Resources RRL.AU +5.6% (update at Tooheys well); Newcrest Mining NCM.AU +1.1% (confirms guidance); Yunnan Aluminum 000807.CN +2.0% (China aluminum smelters agree on output cut)
- Energy: Yanzhou Coal Mining Co 1171.HK +1.5% (acquisition)

>>> US After Hours Summary: KMPH -32% after receiving a complete respo


After Hours Summary: KMPH -32% after receiving a complete response letter from the FDA; RVNC -22% after trial misses primary endpoints

After Hours Gainers: None of note

After Hours Losers:

Companies trading lower in after hours in reaction to news: KMPH -31.6% (issued a CRL by the FDA regarding its Apadaz NDA), RVNC -22.1% (reports results from its REALISE 1 Phase 3 trial of RT001; did not achieve its co-primary and other endpoints), IMGN -16% (to offer and sell to the initial purchasers $100 million aggregate principal amount of convertible senior notes due 2021), NERV -3.4% (to offer and sell common stock in an underwritten public offering; size undisclosed), ZBH -1.5% (announces ~11.1 mln common share secondary offering by selling shareholders)

>>> US Close Dow -0.74% S&P-0,84% Nasdaq-0.91% Russell-1.14%

Closing Market Summary: Stocks Stumble on Global Growth Concerns

The stock market began its week on a lower note as investors weighed ambiguities in the global economic outlook. Furthermore, participants showed a lack of buying conviction ahead of this week's policy meetings at the Federal Reserve and Bank of Japan. Focal points for today's trade included a bid in safe havens, weakening in the U.S. dollar, a violation of technical support at the 2081/2082 price level, and relative weakness from the technology (-1.1%) and industrial (-1.1%) sectors. The Nasdaq Composite (-0.9%) finished behind the S&P 500 (-0.8%) and the Dow Jones Industrial Average (-0.7%).

Equities gapped lower to begin the Monday affair as a negative bias in global indices weighed on domestic stocks. The health of the global economy remained in focus as a mass shooting in the United States, steep losses in Asia, and defensive positioning in Europe each contributed to weakness overseas. Furthermore, tepid economic readings from China and bearish commentary from the IMF regarding China's corporate debt levels also unnerved participants.

The major averages pared some of their opening losses as oil attempted to gain on a softening dollar. However, the reversal in oil would prove to be short lived. WTI crude ended its day lower by 0.4% ($48.88/bbl; -$0.18). The S&P 500 (-0.8%) ebbed lower through afternoon trade, breaking support at the 2084/2085 and finally the 2081/2082 levels. The benchmark index finished near its low as all ten sectors ended in the red with materials (-1.3%), technology (-1.1%), and industrials (-0.7%) showing the largest losses.

The influential technology sector (-0.9%) underperformed as large cap component Apple (AAPL 97.34, -1.49) declined by 1.5%. The stock remained pressured after Nikkei reported that iPhone sales may fall in 2016. Elsewhere, Microsoft (MSFT 50.14, -1.34) finished lower by 2.6% after announcing that it would acquire LinkedIn (LNKD 192.21, +61.13) for $196 per share. Facebook (FB 113.95, -2.67) lost 2.3% after Andrew Left of Citron indicated that he has shorted the stock.

The Dow Jones Transportation Average (-1.1%) ended behind the broader market as weakness in airlines pressured the index and the broader industrial sector (-1.1%). The U.S. Global Jets ETF (JETS 22.37, -0.70) ended lower by 3.0%. On the flipside, Kansas City Southern (KSU 89.36, +0.62) outperformed among rail names.

The CBOE Volatility Index (VIX 20.99, +3.96) jumped 23.3% as investors look forward to the potential macroeconomic implications of the coming weeks. The Federal Reserve will meet tomorrow and Wednesday while the Bank of Japan will meet June 15 and 16. Furthermore, voting in the "Brexit" referendum will conclude on June 23.

The U.S. Dollar Index (94.34, -0.23) ended off its low as the euro and yen each finished with gains against the greenback. The euro/dollar pair ended higher by 0.4% (1.1295) while the dollar lost 0.8% (106.20) against the safe haven yen. Separately, the pound/dollar pair ended lower by 0.1% (1.4237) as investors attempted to account for a shift in "Brexit" polling.

The Treasury complex settled higher as the yield on the 10-yr Note slid three basis points to 1.61%. 

Today's participation was below the recent average as fewer than 843 million shares changed hands on the NYSE floor. 

Investors did not receive any economic data today.

Tomorrow's economic data will include Import and Export Prices for May and May Retail Sales(consensus 0.3%), which will each cross the wires at 8:30 ET. Separately, Business Inventories for April (consensus 0.2%) will be released at 10:00 ET.