Last week, when looking at the latest fund flow data, we noted an unexpected finding: as BofA itself said, "clients don’t believe the rally, continue to sell US stocks" and added that the "smart money" has now sold stocks in the face of this bear market rally for a near record seven consecutive weeks."
It is a quiet start to the week: in the US we have the Chicago Fed’s National Activity index (CFNAI) numbers for February (0.25 expected; 0.28 prior) which missed badly as noted earlier, printing negative after a sharp upward revision to the January number, as well as the latest existing home sales data (5.31mn expected) momentarily.
The sarcastic highlight of the overnight session was the Chinese stock market, where just one month after injecting a record amount of new loans into the financial system, the PBOC lamented the danger posed by China's tremendous debt load: "Lending as a share of GDP, especially corporate lending as a share of GDP, is too high" People’s Bank of China Governor Zhou Xiaochuan told China Development Forum yesterday.
Last Thurssday, the Secretary of Defense Ashton Carter and the Joint Chiefs of Staff Chair General Joseph Dunford testified before the Senate Armed Services Committee (SASC). The topic? The President’s defense budget request for next year.
The nearly three-hour hearing covered everything from the fight against ISIS in Syria to NASA’s research and development projects. But what was remarkable, other than senators using valuable time with Secretary Carter to broker pet projects, was the evident reevaluation of threats to the U.S.