The stock market exodus is accelerating
Matt Turner
BusinessInsider.com
Feb. 19, 2016
The exit from the stock market is picking up speed.
The week ending February 17 saw the largest outflow from equity funds in five months, according to Bank of America Merrill Lynch.
It also marked the seventh consecutive week of equity redemptions, the longest streak since 2008.
That was driven by dramatic outflows in Europe, which saw $4.2 billion in outflows, the most since October 2014. US equity funds saw $6 billion in outflows.
The outflows are closer to “capitulation” levels, Bank of America’s analysts write. Capitulation is where cumulative outflows represent a significant chunk of total assets under management.
There have been $53 billion in outflows from equities over the past seven weeks, according to the note, ahead of the $36 billion in outflows during the August 2015 sell-off.
The cumulative outflows are now approaching the bear market levels set during the August 2011 debt ceiling drama ($80 billion), the 2008 financial crisis ($85 billion) and the 2002 bear market ($65 billion).
Money is leaving the stock market and heading for safe assets, such as government bond funds, which saw $1.6 billion in inflows, and precious metal funds, which saw $1.6 billion in inflows.
Markets have bounced back in the past few days, though Bank of America argues that is the result of a “short squeeze in stocks and credit.”
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