Cyclicals vs. Defensives
Cyclicals vs. defensives


There are many different ways to measure investor confidence and market sentiment.BoA Merrill Lynch looks at their client flows relative to the market. Some of this is instructive:

On the one hand, private clients were net sellers in four of the last five weeks. However, as the chart shows above, there is a possible rotation starting away from Defensives and towards Cyclicals. That move might suggest that sentiment is improving.

One caveat: It is easy to cherry pick what you want when it comes to investor sentiment. This has a bullish color to it, but there are lots of other bearish readings as well.




BofA Merrill Lynch’s Equity Client Flow Trends: Cyclicals vs. Defensives


BofA Merrill Lynch’s Equity Client Flow Trends
Savita Subramanian, Dan Suzuki, Alex Makedon, Jill Carey
Equity and Quant Strategy
Bank of America Merrill Lynch, April 30, 2013

Category: Investing, Markets, Sentiment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Flows say: Still No Confidence in Equities”

  1. tortugajefe says:

    I am on a quest. You may call me either Don or Mr. Quixote. I want to tell the internet to label the axes on their graphs.

    This is a fail.

    The Y axis is what? The units are what?

    The X axis is obviously time, but should still be labelled.

    Please don’t tell me to look in the title. That is not where this information should be. This is grade school stuff people!

  2. socaljoe says:

    I can’t help wondering who has the confidence to buy the securities that BofAML clients are selling.

  3. buddhabucks says:

    And the second chart seems to imply a substantial amount of selling vs. buying over the past 5 years. Shouldn’t it have been more balanced? Or did clients own so many shares/dollar value in 2007 that they have been mostly selling them for the past 5 years???

    • For each share sold, there is a share bought

      This is outflows by MER clients

      • buddhabucks says:

        This is not the most important thing in the world, but perhaps it will help me grasp something I truly am missing. Does the chart say MER clients have been mostly outflowing from MER in the past 5 years? (Am I correct the negative values mean selling to someone outside MER?) If I understand correctly then that would mean MER has either a lot fewer clients, or the clients are holding substantially less in their MER accounts. I appreciate your time, Thanks