Last Week Marked Largest Outflows From Equities Since March 2020 and Biggest US Stocks Selling Since Early 2018 - BofA

September 24, 2021 7:51 AM EDT
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After the S&P 500 printed an all-time high of $4545.85 in the first week of September, the subsequent pullback yielded a 5% correction to low $4300s.

According to BofA’s Flow Show, the last week’s selling marked the 1st outflow for global equities in 2021 ($24.2 billion) and the largest since March 2020. As much as $39.6 billion went into cash (the largest in 4 months), and $10 billion into bonds.

Particularly, the US stocks experienced the largest outflow since February 2018, while Europe saw the largest outflow YTD ($1.8 billion). As far as tech funds are concerned, the last week also marked the 1st outflow in three months ($1.2 billion).

“Global tapering has begun (ECB, BoE, BoC, RBA, Fed)...global central liquidity add was $8.5tn in 2020, $2.1tn in 2021, just $0.1 in 2022 (since COVID outbreak central banks have bought $800mn of assets every hour...shrinks to <$100mn in H1’22); when Fed’s balance sheet peaks, multiples peak, tech leadership peaks; unintended consequences of QE are Inequality & Inflation, puts political pressure on central banks to reduce stimulus (53 rate hikes thus far in ’21, highest in 10 years),” BofA Chief Investment Strategist Michael Hartnett wrote in a note.

The stocks portfolio allocation remains very high at 64.8% among BofA’s clients, compared to the very low allocation of 17.8% into bonds.



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