(Bloomberg) -- The fastest-ever rotation into stocks from Treasuries and high-yield debt has strengthened Bank of America Merrill Lynch's contrarian sell signal, as risk-hungry investors shrug off the global equity selloff.
Stock funds completed another “massive” week of inflows following a record influx last Friday as strong earnings reports offset concerns over a jump in U.S. government bond yields. That has pushed BofA's “Bull & Bear” indicator deeper into negative territory after it dropped to the lowest level since 2013 last week, according to a report from the bank.
Investors poured $25.7 billion into equities in the week to Jan. 31, taking the total inflow for the year to a "remarkable" $102 billion, the bank said, citing EPFR Global data.
While the indicator forecasts a drop in the S&P 500 Index of about 4.8 percent by the end of the first quarter, the relentless tide into stock funds underscores the liquidity of buy-the-dip investors.
A separate sell signal was set off on emerging-market equities after they posted their third-largest inflow on record at $7.8 billion.
To contact the reporter on this story: Natasha Doff in Moscow at ndoff@bloomberg.net.
To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Sid Verma, Cecile Gutscher
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