Merrill Lynch: oil prices tumbled and bitcoin market shows that the “flash crash” increased risk

Source: financial website

Merrill Lynch strategists said on Friday that the crash part of the assets of a week after, the market appeared “flash crash” (flash crash) the risk is increased; in this week, once the glory of the crypto currency bitcoin fell, oil prices fell, and investors to buy stocks are regarded as safety.

They said that many asset classes increased volatility, including oil market, the market in recent weeks the rapid deleveraging, are bearish sign may further hit.

Brent crude on Tuesday hit a eight month low, and also hit the biggest one-day decline in more than three years; Thursday bitcoin is dropped to a 13 month low, has become a sharp decline in assets.

Merrill Lynch strategist advised clients every job selling “, said that although the stock market fell, but the degree of pessimism of institutional investors holdings is not enough to suggest the market is likely to dip.

“The ‘flash crash’ composition is increased…… Bonds, currencies and stock market volatility are increasing, leading to serious affairs, not the normal lever to cause market mismatch risk spreads…… Precipitating factors may be the dollar volatility and / or resulted in gross domestic product (GDP) and macro data is significantly reduced the profit of surprise, “they wrote.

Strategists said that this year is better than the bear market cash stocks and bonds, this is the first time since 1992, although the stock market, money market funds and bond funds reached $122 billion, $35 billion and $24 billion.

EPFR data show that this week the small scale of capital into the stock market, the bond market is $4 billion 600 million, recorded a $5 billion 200 million outflow of funds.

Corporate bond funds from the mass exodus, investment grade corporate bond fund outflows of $2 billion, high-yield bonds fund outflows of $2 billion 300 million.

Merrill Lynch said that the next falling asset could be high-yield bonds and the dollar, the latter years has been up 5.1%.

Strategists wrote, “the last bull” is a high-yield corporate bonds and the dollar. They think into the end and in the first quarter of 2019 will rise further, then turn down.

From the regional capital flows, investors from Europe stock fund withdrawals of $1 billion 300 million. European Equity Fund 35 weeks recorded capital outflows in the past 36 weeks.

U.S. stocks attracted $26 billion in capital inflows from the performance and valuation as a global leader.

Investors in emerging markets stocks in emerging into the region, $1 billion 200 million, for the five weeks of inflows.

Investors from growth stocks to value stocks

By Merrill Lynch strategist, known as the “king of repurchase” Apple Corp shares fell, fell below the important sentiment on the 200 day moving average.

Apple shares may be the biggest monthly drop since the month of 4 2016, the weekly has a seven week decline.

The decline was recently hinted that stocks are rising fast key power stock repurchase, is not enough to stimulate the stock market.

So far, the U.S. stock repurchase has reached a record $800 billion this year, however, the highest Track 100 stock repurchase rate performance of the S & P 500 Index constituent stocks in the S & P 500 index back so far this year rose only 0.9%, this season is down 5.9%.

Apple has led the market’s recent weakness in U.S. technology stocks, is characterized by one of the growth “to” value stock “stocks wheeled. This week there were 1 billion dollars into the value of stock funds, $600 million outflow growth stock fund, further proof of this round of the trend.

Health care and utilities have a stable revenue and high dividend defense stocks, capital inflows are among the best in the list. Health care equity fund inflows of $1 billion 100 million, utilities stocks fund inflows of $700 million.

Financial stocks fund outflows of $1 billion 200 million. (Reuters Chinese network)

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