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| Economy |
| With Money Flowing Into Stocks At A Record Pace, Goldman Does Not See A "Larger Correction" Taking Place |
| 2022-02-14 |
| [ZERO] On Friday we observed that something odd was happening in the market: while stocks were tumbling, pushing most tech names into a deep bear market amid the worst turmoil for risk assets in years, inflows into stocks - both institutional and retail - have been soaring, and according to EPFR data compiled by Bank of America, cumulative equity flows YTD in 2021 have hit a record $153bn, exceeding the pace of early-2021 (when the year started with $151bn in inflows, ahead of a record year of more than $1tn inflows). "How can this be", we asked and answered that the catalyst behind this unprecedented scramble for risk "is that despite falling prices, investors are bailing on other even more impacted securities, and with a record outflows from money markets/cash as well as huge capital flight out of bond funds, this money has to go somewhere, and that "somewhere" is stocks for now, even though if the Fed is indeed set to hike 7 times this year and drain $2+ trillion from its balance sheet, the pain for stocks is only just starting." Over the weekend, Goldman desk trader Scott Rubner picked up on this peculiar flow dynamic, and roughly around the time that Goldman's chief (retail client facing) equity strategist David Kostin was cutting the bank's year-end S&P price target to 4,900 from 5,100 (while warning that much more downside could be in place if a recession hits), Rubner wrote that "with money flowing into global equities "at extreme levels", this would need to change before a larger correction can take place: I would turn bearish if the money slows or reverses" he said, adding that "portfolio rebalances of this size typically last for the full quarter (Q1 2022)." Rubner also reminds that the "headlines will continue to be robust through March (i.e., advisor quarter-end rebalancing) March 4th NFP, March 10th Feb CPI, March 16th FOMC Meeting, etc." Here are the key observations from a still bullish Rubner, as the market continues to crack and remains unable sustain even a modest bounce: |
| Posted by:Besoeker |
| #10 As Riverboat Slim said, "Suckers aren't supposed to have money." |
| Posted by: M. Murcek 2022-02-14 13:43 |
| #9 ^ aka the ARKK Fund for Morons. Or, How To Create Serial Fraud-Bubbles Out of Thin Air 1. Shut down the economy and send millions of Americans home with zip to do for months 2. Send every American checks totaling $5 trillion in play-money 3. Keep the casin0s closed (but the Mary Jane dispens@ries open) 4. Tell the SEC to go away while armies of fraudsters and stock touts rage to social media & pump shit-stocks and bankrupt joke companies 5. Watch as over 8 million little retail gamblers lose 75% or more of the nearly $1 trillion in stupid money thrown away on ARKK-style garbage stocks, shitcoins, "NFT" tulip bulbs etc 6. Rinse, repeat |
| Posted by: Merrick Ferret 2022-02-14 13:36 |
| #8 In days gone by there was a term for this, albeit today we are seeing it on a far grander scale, "pumping". Bring the rubes in and all the pension/investment fund money managed by people whose jobs depend on showing a short term profit. Zero interest rates and commission/fees expenses on both sides of hard assets make the little guy see the markets as the only place to keep up and get ahead. Then, news and advice that doesn't mirror the actual world conditions, and as the rube money flows in, selling incrementally out the backside until the actual reality bites. Bulls make money and bears make money and pigs get slaughtered... or my favorite, "How do you become a millionaire with Merrill Lynch, start with two million"? |
| Posted by: NoMoreBS 2022-02-14 12:41 |
| #7 "Recently printed money" heading into stocks at a record rate. The solution is to print more money and drive up inflation? I don't think so. How about getting rid of the Build Back Broke economy and the corruptocrats who are touting this. Term limits, energy independence, limits on spending in DC and bring back manufacturing to the U.S.. Otherwise, we are headed towards 1929 rapidly. |
| Posted by: JohnQC 2022-02-14 11:11 |
| #6 All those trillions of printed dollars have to go somewhere. The S&P target price is simply indicating that the stock market will absorb enough to compensate for a 10% inflation rate... which is a conservative estimate, IMO, and in real value the market will go down. |
| Posted by: Glenmore 2022-02-14 10:01 |
| #5 /\ SBSW at $16.42, good dividend at 10% and positioned for growth. |
| Posted by: Besoeker 2022-02-14 09:29 |
| #4 The Buy side is dumping tech stocks and buying gold, oil, palladium, and now Russian and other emerging market stocks. Biggest winner of the last two months is S Africa's incredibly undervalued gem, Sibanye Stillwater Smart money is probably also betting on an end to COVIDian idiocy in time for the midterm election campaign = a rebound in hotel and airline stocks |
| Posted by: Merrick Ferret 2022-02-14 09:17 |
| #3 /\ Damn sure is. |
| Posted by: Besoeker 2022-02-14 09:11 |
| #2 Hint: this is the SELL side |
| Posted by: Merrick Ferret 2022-02-14 09:09 |
| #1 I don't understand the S&P price target of 4900-5100 currently the S&P is at about 4400. A target of 4900 would be about a 10% gain in a year. That is not consistent with the 'not bullish, not bearish' narrative. |
| Posted by: Lord Garth 2022-02-14 08:59 |