EPFR data, compiled by Bank of America, show the largest withdrawal of money in eleven weeks of US shareholding funds, while Europeans write down their first departure since April. The cooling of the stock market rebound coincides with the war escalation in the Middle East.
The flow of money that fed the rebound of the bags from the minimum of April was cut abruptly. Between June 5 and 12, the US shares fund Bank of America (Bofa).
The saleswoman was not limited to Wall Street. The funds that invest in European Variable Income – Favors of investors so far this year – suffered their first bleeding in nine weeks, with US $ s600 million of reimbursements. For analysts, the data suggests that the bullish inertia begins to lose strength on both sides of the Atlantic.
Winds against: Geopolitics and macro fears
The week was marked by two voltage spotlights. On the one hand, the bags accused receipt of the climb in the Middle East: Israel launched selective bombings on Iranian facilities on Friday, which dragged the futures of the S&P 500 to a drop of 1.2 % and the index Stoxx 600 European to a 0.8 %decrease. On the other, the market continues to digest a disparate macro references: solid activity data in the United States, fears of global stagflation and the expectation of rates cuts by the Federal Reserve.
In a client note, Michael HartnettBofa’s head of investments, warned that the combination of economic resistance and fiscal stimuli maintains “the door open par for the bulls”, although he clarified that a sustainable advance will require the participation of sectors lagging today. “A climb that does not manage to drag the European actions and Japanese banks could become the prelude to a world bullish trap ‘in the third quarter,” he warned.
USA Wall Street Markets
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Portfolio rotation and tactical caution
Hartnett had recommended Overcome international variable income against the American, under the argument that the exceptionalism of the USA already shows cracks. However, the last report reveals that, at least for now, investors have also raised their foot in Europe, perhaps to take benefits after a rally that surpassed Wall Street at the start of the year.
At the close of the week analyzed, the defensive positions won some traction: monetary funds captured US $ s4.3 billion And high quality corporate debt received US $1.1 billionaccording to EPFR. Gold, shelter par excellence in episodes of geopolitical volatility, also saw net entries.
The market will have to calibrate in the next few days if money removal is a simple technical adjustment or the omen of a greater correction. The Fed Proceedings, the advanced indicators of activity and any novelty in the conflict between Israel and Iran are presented as key catalysts. Meanwhile, Bofa strategists recommend caution: “The global liquidity tide has not yet dried, but the first cracks begin to be seen; it is time to select with magnifying glass the risks that are assumed in the wallet.”
Source: Ambito
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