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By Tyler Durden

Last week, when Bloomberg was celebrating the 7 year anniversary of the third longest, most central bank-supported, and thus “most hated” bull market in history,

While confused by this unprecedented equity outflow, it then promptly spun the “bullish angle”and noted that just because the rally is the “most hated in history”, it probably will continue:

[W]hen people withdraw money, stocks inversely tend to rise later, according to data since 1984. In the 12 instances when funds experienced monthly outflows that were at least 2 standard deviations from the historic mean, the S&P 500 rose an average 7.1 percent six months later, compared with a normal return of 3.9 percent, data compiled by Bloomberg and Investment Company Institute show.

[Once] things start to turn around, bears will be forced to buy. From Feb. 11 through Monday, a Goldman Sachs Group Inc. index

of the most-shorted companies outperformed the S&P 500 by almost 16 percentage points, the most in data going back to 2008.

What Bloomberg failed to touch upon was who was buying. Ever helpful, we explained what Bloomberg was missing:

What Bloomberg is confused by is that despite this unprecedented rally, after a brief period of inflows in 2013 and 2014, investors have been pulling money out of stocks at a record pace, leading not only Bloomberg but many others to dub the move in the market as the “most-hated rally ever.”

Specifically, what Bloomberg fails to note is that as everyone else has been selling, corporations have unleashed the biggest debt-funded stock buyback spree in history, providing the natural offset to wholesale selling by virtually everyone else, and allowing the market to barely dip over the past year.

And since the bond market had gotten clogged up in recent months as a result of the market turbulence, that explains why the ECB proceeded with the unprecedented step of explicitly backstopping the IG bond market, a move which we first, and then JPM explained, would encourage even more stock buybacks.

* * *

Today, nearly a week later, Bloomberg follows up on its celebratory “anniversary” piece with the much needed clarification hinted here, in an article explaining that “There’s Only One Buyer Keeping S&P 500’s Bull Market Alive.” This is what Bloomberg “uncovered”:

Demand for U.S. shares among companies and individuals is diverging at a rate that may be without precedent, another sign of how crucial buybacks are in propping up the bull market as it enters its eighth year. Standard & Poor’s 500 Index constituents are poised to repurchase as much as $165 billion of stock this quarter, approaching a record reached in 2007. The buying contrasts with rampant selling by clients of mutual and exchange-traded funds, who after pulling $40 billion since January are on pace for one of the …read more

Source: Bloomberg Stumbles On The "Only One Buyer Keeping The Bull Market Alive"

    

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Posted March 14th, 2016 in Uncategorized.