Data from Bank of America (NYSE:BAC) shows that investors pulled $16.2 billion from stocks in the past week in the largest redemption since the March stock market crash.
Stock markets have staged a recovery in the past month after the coronavirus pandemic caused a massive drop in March. The rebound has largely been fueled by technology stocks. But Bank of America said there are growing signs that "tech fatigue" is setting in with investors.
Technology stocks saw the first week of outflows so far this year, with investors selling $43 million worth, Bank of America said in a research note to clients. Meanwhile, 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 moved $11.3 billion into bonds and $53.5 billion into cash in the past week, Bank of America said, which indicates that sentiment is at “extreme bearish” levels.
As the coronavirus brought the global economy to a halt, Bank of America analysts said they had seen a massive move to cash among private clients in the past four to eight weeks. The U.S. bank also said that nine of ten clients (90%) believe that the current market recovery is a "bear market rally" and seven out of 10 (70%) said they would only buy the assets that the U.S. Federal Reserve purchases through its stimulus programs.
