Brief rally expected before markets fall further: BofA By Reuters


©Reuters. The New York Stock Exchange, United States, April 16, 2021. REUTERS/Carlo Allegri


LONDON (Reuters) – Markets are likely to see a short-term rebound before resuming the sell-off that has sent Wall Street’s tech index down more than 25% since the start of the year, BofA analysts wrote in a statement. weekly strategy note

“Fear and loathing suggest equities are prone to an imminent bear market rally, but we don’t think the definitive lows have been reached,” argued the team led by chief investment strategist Michael Hartnett.

The current market turmoil, which has seen tech stocks and cryptocurrencies plunge, now rivals the dot-com bust of the late 1990s and early 2000s, as well as the subprime financial crisis. 2008, according to the BofA note.

Tech stocks have seen the biggest outflows so far this year in the week to Wednesday, with $1.1 billion withdrawn from equity funds, BofA noted, citing data from EPFR.

Nervous investors withdrew capital from the bonds for the sixth week in a row, with $11.4 billion outflowing, while $11.6 billion was withdrawn from investment-grade bonds.

By contrast, US government bonds, seen as safe havens, enjoyed their biggest inflows since March 2020, at $11.5bn.

The report also noted that emerging market equity funds experienced the first week of outflows in seven weeks, while in Europe it was the 13th consecutive week of negative capital flows.

(Reporting by Julien Ponthus, Editing in Spanish by Ricardo Figueroa)

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