Fund Flows

Bank of America: "Our Clients Bought The Dip"

"We could see more buying on dips by clients, as the strategy has worked in recent years and we expect to see both higher volatility and higher stock prices this year."

Retail Flows Are Finished: RBC Warns "New Regime" For Stocks About 'Hard' Data & Earnings

'Reflation'-themed fund-flows are fading fast (with equities, cyclicals outflows accelerating), and 'higher rate beneficiaries'-linked bond flows (bank loans, HY, inflation protected) slowing to multi-month lows. As RBC's head of cross-asset strategy, Charlie McElligott notes, their model shows the ETF inflow story is no longer a price-driver of short term stock market pricing... "it's a new regime."

"Alexa... Should I Buy Stocks?"

Are retail investors buttressing US stocks at current (and elevated) levels? A variety of indicators say "Yes". Our primary concern: fund flows can be quite seasonal, with Q1-to-early Q2 a peak period due to retirement account flows. After mid-April, this diminishes considerably. Then, we will need a reliable stream of positive headlines to keep retail investors in the game.

June Rate Hike Odds Slump To 4-Month Lows

While Fed Funds futures imply a 100% probability that The Fed hikes rate by 25bps tomorrow, it appears questions over Trump's policy timeline combined with the collapse in GDP expectations has dragged expectations for another rate hike in June back to its lowest since the election...

"What Has Kept The Rally Going": Some Thoughts From Deutsche Bank

While the duration of the current rally is increasingly inside "outlier" territory, it so far show no signs of stopping. According to Deutsche Bank, there are several key reasons that have kept the market rising: i) Strong equity inflows following large outflows and massive under-allocation; ii) US equity fund positioning moved from under- to over-weight; iii) a return of buybacks, iv) the bypass - so far - of the negative phase in economic data surprises.

Is The Trump Trade Over? Here Is The "Barometer" BofA Uses To Decide

Bank of America has shared what it calls the "best barometer of “Trump/populist/inflation” trade" - banks versus bonds, or even simpler, the ratio of XLF to TLT. If headed up, Trump is still "winning." But once it takes a decisive step lower, risk assets may quickly turn sad!

Some Good News For Active Managers: First Weekly Mutual Fund Inflow In 12 Months

Finally some good news for active managers. After one year of consecutive outflows, last week saw the first inflows into long-only equity mutual funds going back to last February, as according to BofA there finally was a $0.5 billion cash inflow, "a sign of rising investor confidence & broadening participation in equity rally."