© Reuters. Bank of America tells clients to fade S&P 500 rally above 4,550
Global equity funds have witnessed substantial inflows, attracting $23.5 billion in the week ending Nov. 15, marking the second-largest inflows of the year, according to the Bank of America note referencing the data from EPFR Global.
Within this, money market funds received a significant inflow of $20.5 billion, while bond funds received an inflow of $2.6 billion.
BofA analysts urged the broker’s clients to start “fading” the 4550 above.
The S&P 500 recently staged an “epic risk rally,” adding approximately 10% in a matter of days. The index closed at 4,508.24 on Thursday.
The Bank of America bullish and bearish indicator has given a contrary “buy signal” for the fifth consecutive week. Historically, a median gain of 1 to 3% based on such signals over the past 20 years would mean the S&P 500 would reach 4,550 points, just under 1% above its last close.
In terms of regional trends, US stock funds have seen a fifth consecutive week of capital inflows, totaling $25.8 billion, while Europe continues to see capital outflows for the 36th consecutive week.
In the sector breakdown, technology leads in terms of receipts, while healthcare and utilities face the largest reimbursements. Furthermore, US large-cap stocks have seen the most significant additions since February 2022.
