Investors pulled $16.2 billion from stocks in the past week in the largest weekly redemption since the March stock market slump, according to the Bank of America’s weekly flows data.
Stock markets have staged a remarkable recovery in the past month after the coronavirus crisis cause a massive tumble in March. The rebound has been powered by technology stocks but BofA said there were signs of “tech fatigue”.
Tchnology stocks saw the first week of outflows so far this year, with investors redeeming $43 million worth, BofA said its weekly research note.
Gold and high-yield bond funds both saw their biggest six-week inflows on record, with $32 billion flowing into high-yielding bonds in what analysts called a “high-yield comeback”.
Investors added $11.3 billion into bonds and $53.5 billion into cash in the past week, BofA said, with an internal indicator of sentiment at “extreme bearish”.
As lockdown measures aiming to limit the spread of the new coronavirus have brought the global economy to a halt, BofA analysts said that they had seen a massive inflow to cash from BofA private clients in the past four to eight weeks.
The U.S. bank also said that nine of ten clients believed the current market recover was a “bear market rally” and seven out of ten said they would only buy the assets that the U.S. Federal Reserve purchases through it various stimulus schemes.