Three days ago, when looking at the unprecedented, record outflows from US equities (coupled with continued inflow into bond funds into what BofA's Hans Mikkelsen would likely dub the Great Antirotation) we asked a simple question: "who is buying... no really".
Then yesterday, the spoofing algos were briefly spooked when Yellen, for the second time in under one year, issued a warning about valuations, only this time instead of bashing the biotech and social media sector, the non-Series 7, 63 certified financial advisor brought attention to the entire market saying "equity market valuations generally are quite high."
She was referring to a level in the S&P around 2100 (aka 21x forward GAAP P/E multiple) which is where the S&P has been trading for the past several months, a level which was as high as 2120 in the first quarter, on February 20, 2015.
Yet, one entity that clearly disagrees with her assessment is none other than her peer institution in Switzerland, the Swiss Central Bank, which as we noted earlier, owned a record $1.1 billion in AAPL stock as of March 31.
The Swiss National Bank is also the answer to the question we posed, rhetorically, a few days ago:
"Who is buying"?
We now know, because while everyone else, hedge funds included, were dumping stocks in droves, here is what the Swiss National Bank was doing:
Together with companies engaging in record amounts of stock buybacks, the SNB was buying billions and billions worth of shares. So much so, in fact, that its US-listed equity portfolio rose by a record 40% to a record $37 billion.
And now we know, even if we don't know how many other central banks were active alongside the Swiss during its record stock-buying spree. And perhaps even more apropos: which central bank was selling to the SNB?
Finally, those wondering if the Fed gave the SNB the money with which to buy stocks on its behalf, the answer based on the most recent NY Fed FX swap data, is no. At least not in the most recent week.