By William Watts, MarketWatch
Global equities scored a record inflow of $33.2 billion in the week of January 24, Bank of America Merrill Lynch analysts said in their weekly “Flow Show” report on Friday.
They labeled the strong flows, with $21.1 billion going to exchange-traded funds and a record $12.2 billion rolling into mutual funds, a “nonstop euphoric cabaret,” while the firm’s proprietary Bull & Bear Indicator” rose to 7.9 (see chart below). A reading of 8.0 would put the indicator in “extreme bullish” territory, which Bank of America Merrill Lynch treats as a sell signal.
Meanwhile, the flow into equities come as investors stream out of credit, with the flow into equities versus high-yield redemptions running at an all-time high (see chart below).
The S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.10% and Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.89% notched another round of all-time highs on Friday as stocks threatened to continue a run of record closes. The S&P is up 6.7% so far in January, in a rally attributed to strength in corporate earnings, synchronized global economic growth and investors finally drawn to the bull market on fears of missing out, or FOMO.