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Flows say: Still No Confidence in Equities

Posted By Barry Ritholtz On April 30, 2013 @ 12:30 pm In Investing,Markets,Sentiment | Comments Disabled

Cyclicals vs. Defensives
Cyclicals vs. defensives [1]


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
Chart [2]


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

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