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Investors rush back into stocks

  • Maybe sensing the moderate early-2014 selloff is done with, investors poured $13.4B into equities in the latest week, according to BAML - the strongest in 12 weeks and bringing YTD equity asset-gathering back to flat.
  • Emphasizing the risk appetite theme, flows into high-yield bonds of $2.4B were the highest in 17 weeks, and money-market funds saw outflows of $40.45B after receiving inflows of $11.55B the previous week.
  • Still, emerging market debt and equity continues to be sold. In fact, outflows from EM equities over the past four weeks have risen to 2.2% of AUM - just shy of the 3% level which signals a contrarian "buy" signal, says BAML.
  • Turning into a pretty good contrarian signal himself, is Hugh Hendry, who dropped his multi-year caution in December to get "long pretty much anything." His Eclectica Fund subsequently lost 3.6% in January - its worst monthly tally ever.
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Comments (9)
  • The_Hammer
    , contributor
    Comments (3806) | Send Message
     
    Come on man lets dance to the very last beat! do not worry the exit is just a click away.
    21 Feb, 02:52 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (917) | Send Message
     
    Makes sense. The cold is not going to last forever. The US is warming up again, and Markit's excellent flash PMI reading confirmed that the December/January weakness was cold and snow related.
    21 Feb, 02:57 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3806) | Send Message
     
    what makes sense? High yield bonds trading near historically low rates? This is not the time to be aggressively purchasing equities and bonds. Not saying go all in or all out but transition to more cautious posture.
    21 Feb, 03:10 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (695) | Send Message
     
    Agree. In particular, have you seen biotech? Most indices have gone parabolic. Even pharma. So expensive, yet so tempting. I'm hoping for a cratering a la Apple. Must keep finger off the buy button for now.
    22 Feb, 07:49 AM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    gotta flow into the dollar first "and then be converted into the whatever."

     

    looking at the list puts equities at "number four" to me.
    21 Feb, 06:11 PM Reply Like
  • Ray Lopez
    , contributor
    Comments (1507) | Send Message
     
    George Soros is bearish...he's made money being bearish before. Unless he's a senile old coot who has lost his hot hand. Time will tell. I'm largely out of the market at the moment. Remember in 2007 the economists were forecasting another good year for 2008.
    21 Feb, 11:03 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (917) | Send Message
     
    Soros is not bearish. He does have a large short position but this position is smaller than all the long positions he has in various stocks. You could say he is cautious but not bearish.

     

    Furthermore, anything we know about his holdings is from a filing that describes his holdings at the end of Q4. We do not know what he is doing now.
    22 Feb, 11:15 AM Reply Like
  • Chris Bersaw
    , contributor
    Comments (582) | Send Message
     
    The retail lambs being led to slaughter?
    22 Feb, 11:39 AM Reply Like
  • Island_Dweller
    , contributor
    Comments (358) | Send Message
     
    To "get long pretty much anything" reminds me of the time when a local news show did a report on how a group of people chose their stocks. They drew squares on the ground covering a decent sized areas, maybe 15' by 15' and fenced it off then put some sheep, or goats, or some animal, I forgot. Wherever the animal crapped first was the stock they bought. They were up like 30% or something.
    22 Feb, 07:28 PM Reply Like
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