Looming “buy signal” for global stocks: no equity capitulation in flow data but BofAML Global Breadth Rule says equities oversold (net 69% of markets in MSCI ACWI trading below 200 & 50dma; holdouts Japan, India, Taiwan, France…another 2-3% downside triggers contrarian “buy” signal (threshold = net 88%); contrarian bullish for risk assets Q3; last Breadth Rule “buy” signal was Jan 6th
- Equities: $0.4bn outflows (all via ETF’s)
- Bonds: chunky $6.1bn outflows (largest 4-week outflows since Jul’13)
- Precious Metals: flat
>>> Equity Flows
Japan: $0.6bn inflows (inflows in 18 out of past 19 weeks)
Europe: $1.7bn inflows (7 straight weeks)
US: $5.9bn outflows (2 straight weeks)
EM: $4.4bn inflows (2 straight weeks)
>>> Fixed Income Flows
- 10 straight weeks of outflows ($2.3bn) from govt bond funds (longest outflow streak since Mar’09)
- 6 straight weeks of outflows from EM debt funds ($0.2bn)
- 4 straight weeks of outflows from HY bond funds ($2.9bn)
- IG bond funds eke out $0.3bn inflows after 2 weeks of redemptions
- Modest $0.5bn outflows from municipal bond funds (conspicuously muted outflows given Puerto Rico’s likely debt restructuring/moratorium)