Dot-com bubble-like exit from markets – Investors liquidate even the most ‘favorite’ shares

Liquidity is abandoning all assets and the flight of investors is deepening as they rush to leave securities such as Apple Inc., according to strategic analysts at Bank of America, who believe that the markets have not yet seen their lows.

Shares, bonds, cash and gold outflowed in the week ended May 11, according to BofA chief analyst Michael Hartnett, citing EPFR Global figures. Technology shares suffered their biggest outflows so far this year, reaching $ 1.1 billion, second only to banks, which lost $ 2.6 billion.

“The definition of true capitulation is that investors sell what they love,” Hartnett said, referring to Apple, the big tech companies, the dollar and private equity. The collapse of cryptocurrencies and technology is now competing with the dot-com bubble crash and the global financial crisis, he says.

Apple, which was among the top stocks that pushed Wall Street main indexes to new highs after the sell-off caused by the 2020 pandemic, is now trading in a bear market, losing only 10% this week. Six weeks ago, it was moving close to a historic high. The Nasdaq 100 is also entering its sixth consecutive week of decline, the longest run since November 2012.

The S&P 500 is also flirting with the bear market area – which is defined as a 20% drop from the recent high – and although BofA strategic analysts said they expect a recovery in the short term, they still see room for further stock falls. “Fear suggests that stocks are prone to an impending bear market rally, but we do not believe the final lows have been reached,” Hartnett said.

It is worth noting that last week the outflow of shares reached $ 6.2 billion, with a small inflow of US shares being offset by funds that left the European market and emerging markets. A total of $ 11.4 billion was bond outflows, while $ 19.7 billion was cash outflows and $ 1.8 billion came out of gold.