Investors are still straying from stock. ETFs and buybacks move the markets

For now, the stock market demonstrates enormous upward movements and stubbornness, but what is the reality of the move? Last time, the boom in stocks comes mostly from buybacks and cash flows to stock-traded funds, and the selective choice of companies and their stock lagging behind. This is the data from Bank of America Merrill Lynch.

In the past week, redemption of shares amounted to $ 1.4 billion, an increase of 5.8% on an annual basis, and if the trend persists in 2019, it will be a new annual record. During this time, the ETFs attracted $ 854 million in cash last week. Investors remain with more net short positions in stocks for a second consecutive week, with shorts worth $ 1.481 billion between February 25 and March 1.

Despite the outflow of stocks, the S & P500 registered growth for the ninth consecutive week, adding to the starting rally at the end of 2018.

"Flows in the funds show that while we are seeing a strong recovery from Christmas in 2018, the degree of participation - both by institutional investors and retail investors - has remained almost imperceptible." - says Art Hogan, chief strategist at National Securities. "We're seeing a V formation that describes the recovery in the markets, and yet the positions are small."

Institutions have sold individual shares in each sector excluding raw materials and utilities last week, while retail investors have sold shares in all sectors. At the same time, institutions are buying stakes in ETFs across sectors other than consumption, communications and industrial sector. Retail investors are targeting ETFs from all sectors except finance and consumption.

Source: CNBC

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