Stock Groups

No signs of equity market capitulation yet

by Mike Robinson

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© Reuters. FILE PHOTO – A man walks by a Bank of America sign, New York City, New York. January 19, 2022. REUTERS/Carlo Allegri

LONDON, (Reuters) – Investors have pulled cash from bonds to invest in stocks and cash over the past week. Equity positioning was showing “zero signs that capitulation despite prices and flows”, BofA’s Weekly Flow Report showed Friday.

Global equity saw $7 billion invested in cash, $6.2 billion was inflows to equities and investors borrowed $3.5 billion on bonds. This is according to BofA who are analysing EPFR data.

Notable flows include emerging market and high yield debt, as well as investment grade and high-yield bonds. European stocks had the highest outflows in three months.

BofA analyst Michael Hartnett stated in their note that “Inflation shock” refers to rate shock, which is translated into negative returns for credit and stocks in 2022.

These experts expect emerging markets, cash volatility, and commodity prices to be better than credit, stocks, and private equity for this year.

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