{"id":48297,"date":"2019-09-06T15:02:39","date_gmt":"2019-09-06T20:02:39","guid":{"rendered":"https:\/\/olduvai.ca\/?p=48297"},"modified":"2019-09-06T15:02:45","modified_gmt":"2019-09-06T20:02:45","slug":"there-has-been-just-one-buyer-of-stocks-since-the-financial-crisis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=48297","title":{"rendered":"There Has Been Just One Buyer Of Stocks Since The Financial Crisis"},"content":{"rendered":"\n

There Has Been Just One Buyer Of Stocks Since The Financial Crisis<\/a><\/h3>\n\n\n\n

Over the weekend we showed a chart <\/a>which demonstrated that the bulk of the 21st century has been characterized by equity retail fund out<\/strong><\/em>flows offset by a tsunami of bond inflows, i.e. a reverse “great rotation.” The chart also illustrated that periods of “big bond in<\/strong><\/em>flows often preceded big policy changes”, hinting that some major event was coming; meanwhile big bond out<\/em><\/strong>flows (e.g. 2008\/13\/18) tended to coincide with the most bearish returns across asset classes, which may explain why in a time of record bond <\/em>inflows, i.e., right now, stocks <\/em>are trading near all time highs…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

<\/a>… even if it did – as we said on Sunday – pose a question: “just who is buying stocks here?”<\/strong><\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

Now, in his latest Flow Show weekly report, BofA CIO Michael Hartnett confirms that the flows continued for one more week, as another $11.4 billion flowed into bonds, while $8.4 billion was redeemed from stocks (a clear sign investors are not <\/strong>worried about bond bubble for now, with chunky inflows to both IG ($7.9bn) & govt bond ($3.5bn) funds).<\/p>\n\n\n\n

More importantly, when looking at the bigger picture and finding $213 billion in redemptions from equity funds stands in stark contrast to $337bn inflows to bond funds; Hartnett answered our pressing question: who is buying stocks here? <\/em><\/p>\n\n\n\n

His answer: “the sole buyer of US stocks remain corporate buybacks, not institutions” <\/strong>as shown in the chart below.<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

This is notable not only because it means that without the buyback bid (made possible by record cheap debt, which is used to fund corporate stock repurchases) stocks would be far, far lower, but because it is a carbon copy of what we observed\u00a0almost exactly two years ago<\/a>, suggesting that between the summers of 2017 and 2019\u00a0absolutely nothing has changed.<\/em><\/p>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

There Has Been Just One Buyer Of Stocks Since The Financial Crisis Over the weekend we showed a chart which demonstrated that the bulk of the 21st century has been characterized by equity retail fund outflows offset by a tsunami of bond inflows, i.e. a reverse “great rotation.” The chart also illustrated that periods of “big bond inflows often […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3038,88,24041,6417,753,6364],"class_list":["post-48297","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-america","tag-bonds","tag-financial-marekts","tag-michael-hartnett","tag-stocks","tag-us-stocks"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/48297","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48297"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/48297\/revisions"}],"predecessor-version":[{"id":48298,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/48297\/revisions\/48298"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}