Investing
Global markets in “unambiguous contrarian buy territory” – BofA
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LONDON (Reuters) – The trillions wiped off global markets in recent weeks has triggered a contrarian ‘buy’ signal from BofA’s closely-followed ‘Bull & Bear’ sentiment indicator, while emerging markets are seeing their toughest time since the peak of the COVID crash.
LONDON (Reuters) – The trillions wiped off global markets in recent weeks has triggered a contrarian ‘buy’ signal from BofA’s closely-followed ‘Bull & Bear’ sentiment indicator, while emerging markets are seeing their toughest time since the peak of the COVID crash.
Fears that inflation and fast-rising rates will send major economies into recession have sent global markets in a downward spiral with global equities losing close to 18% since the beginning of the year. It is the worst start to a year on recent record.
BofA’s analysts said their ‘Bull & Bear’ indicator had now moved into “unambiguous contrarian buy territory”, given the huge redemptions in developed market stocks, riskier high-yield debt and emerging market bonds.
The week saw the largest ouflows from emerging markets debt since March 2020 and the biggest withdrawals from high yield bonds in 14 weeks, at $6.1 billion and $4.3 billion respectively BofA noted, citing EPFR data.
Across the equity space, Europe, which is being hit hardest by the Russia-Ukraine war, suffered a fourteenth week of withdrawals.
All in all, $5.2 billion exited world equities funds, while a seventh week of outflows from global bond funds saw $12.3 billion leave.
(Reporting by Julien Ponthus, editing by Marc Jones)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage.
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. They often present investment opportunities due to their potential for high returns.
A financial crisis is a situation in which the value of financial institutions or assets drops significantly. It can lead to a loss of confidence in the financial system.
Investment portfolios are collections of financial assets such as stocks, bonds, and cash equivalents, held by an investor to achieve specific financial goals.
Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying the share price by the total number of shares.
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