The 2022 Capitulation Has Been in Bonds, Not Stocks – BofA
2022.06.24 15:12
The 2022 Capitulation Has Been in Bonds, Not Stocks – BofA
By Investing.com Staff
Investors have capitulated in bonds, not stocks this year, BofA Securities’ latest “flow show” data notes.
BofA Chief Investment Strategist, Michael Hartnett, highlights that YTD investors have bought $195 billion of stocks and sold $193 billion of bonds.
Looking at flows to know for the week, Hartnett notes investment-grade bonds had outflows of $16.6 billion, the largest since April 2020. He also noted the biggest global equity outflow in 9 weeks. Meanwhile, financials saw outflows for the 13th consecutive week, while materials had their largest outflow ever. Also, they saw the biggest redemptions from energy in 5 weeks.
BofA Private Clients now have their lowest allocations to stocks since November of 2020 at 61.2% and largest in bonds since February f 2021 at 18.9%. Portfolio cash positions of 12.6% is the largest since October of 2020 and now exceeds the 12.4% historical average.
The firm’s BofA Bull & Bear Indicator remains at “maximum bearish” level of 0. Also, a contrarian “buy signal” was triggered Tuesday with over 88% of equity indices trading below their 200 DMA and 50 DMA.
