Bank of America: Wall Street vs Main Street

The rift between Wall Street and Main Street is becoming wider when it comes to equity investment.

According to Bank Of America, for the third consecutive week, individual investors are targeting purchases, while institutional investors and hedge funds remain net sellers. On the one hand, we have individual investors who consider current prices suitable for purchases and, on the other hand, institutional investors who accumulate rumors of a slowdown in the global economy and high yields on government bonds.

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab & Co. is of the opinion that persistent retailing is a sign that sellers who wiped out more than $2 trillion. market capitalization may continue until buyers are exhausted, and then trigger a second downward wave.

The graph below shows a detailed mood among BofAML customers, and what we need to consider is that a minimum volume of sales by hedge funds and institutional investors manages to keep the price low while individual investors pour large amounts of money into the market.

This is "a suggestion of small investors' confidence that the bullish market is not over," said Carey Hall and Savita Subramanian, strategists at BofAML. As far as actual cash flows are concerned, such a situation is characterized as the last attempt of the bulls before we observe a more thorough correction.

However, key stock indices in the US remain key, and purchases are the most appropriate trade.

Charts: Used with permission from Bloomberg Finance L.P.

Source: Bloomberg Finance L.P.

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