© Reuters. Bank of America is telling clients to fade S&P 500 rally above 4550
Global stock funds have witnessed substantial inflows, attracting $23.5 billion in the week ending November 15, marking the second-largest inflow of the year, according to Bank of America’s note referencing EPFR Global data.
Within this, money market funds received a significant influx of $20.5 billion, while bond funds saw an inflow of $2.6 billion.
Analysts at BofA urged the broker’s clients to start “fading” the above 4550.
The S&P 500 staged an “epic risk rally” recently, adding about 10% in a matter of days. The index closed at 4,508.24 on Thursday.
Bank of America’s bull and bear indicator has signaled a contrarian “buy signal” for the fifth consecutive week. Historically, a median of 1-3% gains based on such signals over the past 20 years would imply the S&P 500 reaching 4,550 points, just under 1% above its latest close.
In terms of regional trends, U.S. stock funds have experienced a fifth consecutive week of inflows, totaling $25.8 billion, while Europe continues to witness outflows for the 36th consecutive week.
In the sector breakdown, technology leads in terms of…
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