Wall St Banks Sending Warning Signals… Investors Pull Billions In Longest Outflow Streak Since '04… Worries Grow About Stock Market's 'Bad Breadth'…

Wall Street Banks Are Sending Warning Signals

Five big ideas that made the week interesting, and the stories behind them.

1) We Could Be Close to a Downturn

The rally looks like it’s about to peter out, say analysts at banks like HSBC Holdings Plc, Citigroup Inc., and Morgan Stanley. They’re looking at the relationships between stocks, bonds, and commodities—and they’re worried people may be ignoring fundamentals. “Just like they did in the run-up to the 2007 crisis, investors are pricing assets based on the risks specific to an individual security and industry, and shrugging off broader drivers,” Bloomberg’s Sid Verma and Cecile Gutscher report.

Societe Generale SA

2) The New iPhone Won’t Blow You Away

Not with anything revolutionary, anyway. There’s still a lot of sizzle and improved features in the iPhone 8. The device will be more powerful, the cameras will work better, and you’ll even be able to unlock it with your face. Some of the other stuff, however, is already on rival phones: wireless (inductive) charging, an almost all-screen front, an OLED screen. “We don’t feel an impatience to be first,” Apple CEO Tim Cook told Bloomberg. “Our thing is to be the best and to give the user something that really makes a difference in their lives.”

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Investors pull billions from US stocks in longest outflow streak since 2004

  • Investors have pulled $30 billion from U.S. stock funds over the last 10 weeks, Bank of America Merrill Lynch says.
  • The latest week of outflows marks the 10th straight week of withdrawals, the longest in more than a decade, and internal positioning changes also indicate investors are becoming more defensive, the report says.
  • The outflows occurred despite the S&P 500’s nearly 1 percent gain this quarter and a record high on Aug. 8.

Investors pull billions from US stocks in longest outflow streak since 2004 from CNBC.
Investors are fleeing U.S. stocks in a way they haven’t since 2004.
For 10 straight weeks a total of $30 billion has left U.S. stocks, marking the longest streak of outflows since 2004, Bank of America Merrill Lynch said in a Thursday report, citing EPFR Global data.
Investors turned instead to emerging markets and European and Japanese stocks, which saw $36 billion in inflows over the last 10 weeks, the report said.

Streaks of consecutive weekly US stock fund outflows

Source: BofA Merrill Lynch Global Investment Strategy, EPFR Global
BofAML’s breakdown of last week’s fund flows pointed to more aversion to risk among investors, and could add to some analysts’ worries about deteriorating market internals.
The 10-week outflow from U.S. stocks comes despite the S&P 500’s nearly 1 percent gain this quarter and a record high on Aug. 8.

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Worries Grow About the Stock Market’s ‘Bad Breadth’

A slew of signs are pointing to a decline in the stock market’s momentum

Traders are keeping busy in the late-summer doldrums by parsing the internals of the U.S. stock market.
Their diagnosis: Not great.
A slew of signs are pointing to bad market breadth, or weakening measures of broad-market momentum. Even though the S&P 500 has inched down just 1.7% from this month’s all-time high, the  Journal’s Morning MoneyBeat newsletter noted Friday that a confluence of worrisome signals suggest that the market could be setting up for a pullback.

Exhibit 1 is the 50-day moving average of the S&P 500, a short-term yardstick used by technical analysts to track trading momentum. The benchmark failed to hold above this measure on Wednesday and on Thursday rose to the line before retreating to close negative on the day. The longer the benchmark takes to break back above, the thinking goes, the sturdier this technical resistance will become, hindering the potential for gains.

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