BANK OF AMERICA: Millennials could signal the 'big top' in the market

pulse

June 23, 2017 2:34 PM

The bull market in stocks could soon be added to the list of things that millennials allegedly killed.

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The bull market in stocks could eventually be added to the list of things that millennials allegedly killed.

According to Bank of America Merrill Lynch strategists, a rise in millennial participation in the market could be a sign of the top.

The bank's weekly examination of fund flows reflected outsized bets on deflation over higher inflation.

According to BofAML, the 4% drop in oil prices this week represents the "poster child" of this deflationary narrative. Also, investors moved money out of funds that invest in bank loans for the first time since the week of the US election, and the defensive utilities sector had the biggest inflows in nearly a year.

The continued rise of mobile trading platforms, which bring the market into an ecosystem that millennials already spend much of their time on, could be a key driver of participation going forward. For example, Victor Jones, the director of trading at TD Ameritrade, told Business Insider last week that millennial clients make up 40% of the brokerage firm's new customers, with over half of their trades coming from mobile devices. Their trades, he noted, tend to skew towards futures and derivatives.

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