Beyond the depressing, backward-looking policies that the Brexit vote and the election of Donald Trump as US president seem to have brought, there is a ray of hope.
People elsewhere in Europe, seeing the first ugly consequences of populism, might find enough motivation to go to the polls in elections just to try to keep populists out of government. I am talking about the decent people who are tired of politicians but aren’t seduced by the populists’ siren calls.
Equities were the big winners of the past week in terms of capital flows, while investment grade bonds continued to haemorrhage funds.
Stocks were technically oversold, and sentiment was on the brink of a “buy” signal last week, when at the same time there were weekly inflows into European, US and Japanese equities, according to flows data.
Capital flows data show that Greece was seen as a “buy the dip” opportunity in Europe last week, before the results of a referendum on the eurozone bailout offer were known.
Money shifted from bonds into equities for the second week running as the Greek debt crisis deepened, in what may be the beginning of the end for the decades-old bond bubble.
The first outflows in 78 weeks from investment grade bonds show how bad the “bond massacre” has been, according to a report about the most recent capital flows from Bank of America Merrill Lynch.
Capital flows showed a “bond massacre” is underway, with the largest weekly outflow from bond funds in 18 months, according to Bank of America Merrill Lynch.
Equities saw their largest inflows in 11 weeks in the week that ended on June 3, with the contrarian “buy” signal triggered in early January still in place, data from Bank of America Merrill Lynch showed.
Capital flowed back into stocks last week, with European equities the favourite destination in the developed world, after posting their best earnings season in years.
Chinese stocks saw their biggest inflows in 14 weeks last week, when emerging market equity funds saw their first inflows in five weeks, the latest data show.