Markets rose last week. The S&P 500 rose 0.6 percent, its fourth consecutive weekly gain, while the STOXX Europe 600 rose 1.7 percent, its strongest weekly gain in more than four months.
Data from Bank of America Merrill Lynch showed that flows into US stock funds and ETFs last week were the strongest in six weeks.
Strong consumer and government spending helped the US economy grow at a 4.1 percent rate in the second quarter, the fastest pace in almost four years, according to a report on Friday.
“We remain fairly constructive about equities,” said Chad Oviatt, director of investment management for Huntington Private Bank. He added that “there’s a lot of confidence about earnings growth” but also suggested that the GDP number “will signal that the Fed can continue with its plan for rate increases”.
Tom Pearce, European equity strategist at UBS, wrote in a note on Friday that European per-share earnings growth “has accelerated”. However, he noted that the “breadth of surprises has been weak”.
Indeed, despite the strong inflows into US stocks, BAML analysts suggested that investors aggressively sell any equity rally if the S&P 500 does not put in new highs by the end of this quarter and if China’s stock market does not rebound.
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