LONDON (Reuters) – Investors are neither extraordinarily bullish nor bearish, in response to Bank of America Merrill Lynch’s gauge of market sentiment, as they weigh the influence of commerce tensions between the United States and China.
Investors pulled $19.5 billion out of equities in the week to May 15, whereas bonds added $5.1 billion in their 19th week of inflows, Bank of America Merrill Lynch strategists stated on Friday.
The financial institution’s “Bull & Bear” gauge has fallen to four.7, indicating cross-asset positioning is neither extraordinarily bullish nor bearish, it added.
Global shares have been shaken in current days by a ratcheting up of the U.S.-China commerce battle, with the Communist Party’s People’s Daily on Friday utilizing a entrance web page commentary to say the commerce conflict would by no means convey China down.
U.S. equities had “chunky” outflows of $eight.1 billion, whereas it was the third week of outflows from Japan, with $1.eight billion exiting. Europe has seen outflows for 60 of the past 62 weeks, with $four.5 billion flooding out in the past week, BAML strategists stated, citing EPFR flows knowledge.
Bond yields have slumped in current days, with Germany’s benchmark 10-year bond yield hitting greater than 2-1/2 yr lows on concern about U.S.-China commerce relations and fears Italy might break European Union fiscal guidelines.
The week to May 15 was the 17th week of funding grade bond fund inflows to $7.eight billion, whereas high-yield bond outflows have been their highest since January, with $three.5 billion exiting.
Emerging market debt outflows reached $2.9 billion, the most important since June 2018, it stated.
Reporting by Tom Arnold, modifying by Karin Strohecker and Toby Chopra