British Prime Minister Theresa May is expected to make a final attempt at persuading lawmakers to back her "new" Brexit deal on Wednesday but the agreement — and May's...Europe Politicsread more
Consumers in China are taking to social media to express their support for Huawei as the U.S. government looks to ramp up pressure on the Chinese smartphone maker.Technologyread more
Tensions between the two parties have heightened in recent months as the campaign for seats in the Brussels and Strasbourg-based parliament has crescendoed.Europe Politicsread more
Shares of Saudi shopping mall operator Arabian Centres were trading at 24.34 riyals ($6.49) in early deals in Riyadh.IPOsread more
There is at least one thing in common between the U.S. and Russia – their willingness to weaken the European Union, a top EU official said.Politicsread more
U.S. President Donald Trump's latest tariff increase — and Beijing's plans to counter them — are hitting U.S. companies in China, according to a joint survey this month by...China Economyread more
"We are also constantly watching whether the trade war will turn into a tech war," Ma said Tuesday, according to a CNBC translation of his Chinese remarks published by a locak...China Economyread more
TransferWise, the money transfer start-up, was valued at $3.5 billion after investors bought $292 million of shares in a secondary sale.Technologyread more
Indian Prime Minister Narendra Modi's likely return to power for a second term will likely be positive for his country's growth, according to economists and investors.Asia Economyread more
Kohl's, J.C. Penney and Nordstrom release disappointing earnings news, putting a damper on their sector.Retailread more
"Pretty much the entire suite of apps that 'talk' over the internet could be vulnerable," said Tom Uren, a senior analyst at the Australian Strategic Policy Institute's...Cybersecurityread more
The frantic dash into stocks has hit a boiling point, causing a reliable indicator from Bank of America Merrill Lynch to flash a sell signal Friday.
High levels of investor enthusiasm can be a bad thing when it comes to financial markets, as too much money can push valuations out of whack. BofAML's historically reliable indicator is pointing to just such a period.
The firm's strategists say overheated bullishness tripped its "sell" indicator Tuesday, in the early stages of what has been a rough week. When all is said and done, technical indicators point to a level of 2,686 on the S&P 500, which would represent a nearly 5 percent drop from Thursday's closing level, BofAML said in a note to clients.
This is the 12th time that the "Bull & Bear" indicator has indicated a "sell" position dating to 2002, and each time has been accurate, the firm said in a note last week. The average peak-to-trough return is a drop of 12 percent.
That's the bad news.
The firm, however, retains a constructive view on the market, with technical strategists telling clients earlier in the week that the fast start in January bodes well for the rest of the year. Based on the 5.6 percent gain for the first month of the year, history suggests the S&P 500 is likely on its way to 3,000 by the end of 2018 and even could hit 3,100, respective gains of 6.3 percent and 9.9 percent.
What's triggering the near-term concern, though, is another surge in cash both to mutual and exchange-traded funds.
Stock-focused funds took in another $25.7 billion for the week ended Wednesday. ETFs saw the bulk with $22.4 billion, but active mutual funds again saw positive inflows, at $3.4 billion. Together, the funds have seen investors pour in $102.7 billion already in 2018.
Despite the continued run into equities, bond funds also saw another positive week, taking in $5.7 billion for a year-to-date tally of $37.7 billion.
The trends are all part of a big start to the year for ETFs, which took in a record $79 billion in January, including $42 billion to U.S. stock funds, according to Citigroup.
Stocks, however, are in a rut, with the Dow industrials seeing losses cross 2 percent for the week in early Friday trading. The index was off more than 300 points in the first half-hour of trading Friday.
Despite the pullback, it's been a great run for the market as the Dow has gained more than 31 percent over the past year.
Such pullbacks aren't unusual in a hot market, and many leading market strategists expect 2018 to be a volatile period overall.
Investors, thus, have been spreading money around. Within the big surge to stock funds, emerging markets took in $7.8 billion and Japan attracted $2.4 billion in fresh money, though the U.S. continued to lead with $11.1 billion, the biggest influx in 33 weeks, according to BofAML.
In style, large-caps dominated with $13.2 billion. Sectorwise, tech and financials took in $1.3 billion apiece.