Wednesday, 17 April 2019

US stocks could see melt-up after turnaround in investor sentiment and fund flows

Markets rose on Tuesday.

The S&P 500 rose less than 0.1 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 rose 0.2 percent.

Some analysts see further gains for stocks.

UBS strategists led by Daniel Waldman said that “markets are priced for growth stabilization, but not for acceleration”, and that “leaves room for stocks to run higher”.

“We have a risk of a melt-up, not a meltdown here. Despite where the markets are in equities, we have not seen money being put to work,” said Larry Fink, CEO of BlackRock.

That could be changing. Recent surveys have shown that individual investors have become more bullish and less bearish, with US equity funds seeing US$4.3 billion in inflows in the week ended 10 April after a US$19.7 billion outflow from the start of the year through 3 April.

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