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Jan. 26, 2018, 12:08 p.m. EST

‘FOMO’ stock market sees a week of record inflows

BofAML Bull & Bear indicator on cusp of sell signal

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By William Watts, MarketWatch

Getty Images
Investors continue to join the rally.

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.

-50.03 -1.10%
Volume: 2.54B
Jan. 20, 2022 4:55p
US : Dow Jones Global
-313.26 -0.89%
Volume: 369.07M
Jan. 20, 2022 4:55p

William Watts is MarketWatch's deputy markets editor, based in New York. Follow him on Twitter @wlwatts.

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