Skip to: Content
Skip to: Site Navigation
Skip to: Search


The Reformed Broker

Who bought the dip?

Tumbling down in its worst weekly drop of 2013 so far, the S&P 500 fell by 2.1 percent last week. Retail investors, however, bought on a net basis. 

By Guest blogger / June 26, 2013

Earlier this year, traders work on the main trading floor of the New York Stock Exchange shortly after the opening bell in New York, New York. Retail investors bought all ten S&P sectors on a net basis last week — a phenomenon that has occurred only seven other times since 2008.

Mike Segar/Reuters/File

Enlarge

Last week the S&P 500 fell 2.1% - it's worst weekly drop of 2013 so far.

Skip to next paragraph

Joshua has been managing money for high net worth clients, charitable foundations, corporations and retirement plans for more than a decade.

Recent posts

Hedge funds sold as did institutions. But retail investors were out there buying on a net basis according to the latest equity flows report from Merrill's Quant Strategy group. This is rather amazing.

Four important tidbits from the report:

* Not only did the retail, what Merrill terms their "private client" segment, do all of the buying - they bought all ten S&P sectors on a net basis. Also amazing. This is only the eighth week in which retail investors have done this kind of broad-market buying since 2008. The last time we saw them buy the whole market was in January.

* The hedge fund segment sold again last week, three in a row. They are now net sellers of the equity market on the year - they were only net buyers during the March and April period of new highs, because, en masse, they are essentially benchmark-chasing pussies who jump in and out of the tape like they're "managing risk" and then lever up like maniacs when they begin to trail the markets (not BofA's words, mine).

* Small caps saw net sales from all three groups.

* While all three segments - private client, hedge fund and institutional - posted a combined a net sale of stocks last week, the one sector that all three groups actually added to was Technology. It was a record week for flows into tech stocks, the first over $1 billion week since 2008. BofA has previously determined that tech is actually the best performing sector during periods of rising interest rates so this makes sense. Chart below:

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here.To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thereformedbroker.com.

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 

Doing Good

 

What happens when ordinary people decide to pay it forward? Extraordinary change...

Danny Bent poses at the starting line of the Boston Marathon in Hopkinton, Mass.

After the Boston Marathon bombings, Danny Bent took on a cross-country challenge

The athlete-adventurer co-founded a relay run called One Run for Boston that started in Los Angeles and ended at the marathon finish line to raise funds for victims.

 
 
Become a fan! Follow us! Google+ YouTube See our feeds!