Nov 7, 2019

Investors are getting defensive

Traders work on the floor of the New York Stock Exchange. Photo: Spencer Platt/Getty Images

Equity investors are making a sustained move to value stocks and more defensive sectors of the market, data from Bank of America Merrill Lynch show

The big picture: Equity analysts say BAML clients are increasingly moving into health care and utilities (which saw nearly record inflows from both institutional managers and hedge funds) as well as large-cap stocks and domestically oriented sectors.

Why you'll hear about this again: In its last fund manager survey, released in mid-October, BAML analysts noted that "investors rotated into defensive equities like healthcare and consumer staples and out of cyclicals like materials and banks."

  • In a note to clients Tuesday, they said: "Value ETFs continued to see inflows for the past eight weeks, as we see a case for sustained rotation to Value once macro data starts bottoming out."

Of note: Investors took profits on equities after the S&P 500 and Nasdaq touched all-time highs last week, with "ETF inflows dwarfed by single stock outflows," that led to net selling for equities after six straight weeks of net buying.

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Wall Street loves a party

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Investors put their recession umbrellas back in the closet last week and broke out their party hats, as all three major U.S. stock indexes hit fresh record highs. The market is bullish on the expected pause in President Trump's trade war with China and market participants have plenty of ammo to drive stocks higher.

What's happening: Investors are moving back into risky assets like stocks in a big way and selling out of traditionally safe ones.

Go deeperArrowNov 11, 2019

Macquarie strategists project stock market will double in value by 2030

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Strategists at $234 billion asset manager Macquarie Investment Management laid out an exceptionally bullish prediction for U.S. stocks — their equities team is calling for the market to double in value over the next 10 years.

Why it matters: That would put the Dow at around 55,000.

Go deeperArrowDec 3, 2019

Recession fears have vanished

Illustration: Aïda Amer/Axios

Money managers are not just bullish about the stock market, they're euphoric about the current and future state of the global economy, data from the Bank of America Merrill Lynch shows.

What's happening: BAML's monthly survey of fund managers from around the world finds investors are all in on the stock market, with global optimism rising by the most in 20 years and expectations of real economic growth jumping by the most in the history of the survey.

Go deeperArrowNov 13, 2019