Much of the selling is in the passive investment products favored by retail investors. After a surge of inflows in January, U.S.-listed exchange-traded products posted their first two-straight months of outflows since 2008, according to Credit Suisse.
“Right across the board, everybody came into the year in a pretty buoyant mood,” said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch. He said the latest outflows reflect a shift from “sort of goldilocks enthusiasm” to a “resignation” that stocks will rise only modestly this year.
Investors’ “long positions of equities is being clipped and temporarily people are going into cash, but it’s not 2008 or 2009 where people are viewing the equity market as dangerous,” Hartnett said. “It was frothy at the beginning of the year and now it’s less frothy.”
The S&P 500 is about 7 percent below its record high and tracking for gains of more than 1 percent for April. But stocks have struggled to remain green for the year amid the latest concern, a peak in earnings growth. The benchmark index was unchanged for 2018 in Friday afternoon trading.
Be the first to comment