Investors added the most money on record to equity funds last week as the earnings season began on a positive note and global stocks continued to post record highs.
Investors have enjoyed a stellar start to 2018 as bets on broadening global economic growth and profit expansion pushed stocks to all-time highs this month. The MSCI ACWI Index, a gauge of both developed and emerging market equities, has risen 6.3 percent since the beginning of the year.
The rush to risk assets sparked a note of caution from Bank of America Merrill Lynch strategists, who see a “tactical pullback” in the stock market as likely in the first quarter, at least for the S&P 500. The bank’s “Bull & Bear” indicator has given the highest “sell” signal since March 2013, according to a report Thursday from the bank.
As for the “bull and bear” indicator, it may not be a flawless gauge. The last time the sell signal was this high, in March 2013, the S&P 500 still went on to gain more than 19 percent in the following 12 months.
Source: Bloomberg Pro Terminal
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