Meanwhile, other reports released by the bank just before the FMS results were presented provide a lot of context for some of these assertions. Just as past editions of the FMS predicted, European equities have seen the longest period of outflows in over 7 years. Essentially, almost every month had seen a outflow out of European stocks in the Year to Date (YTD).

Supporting the overarching thesis of the statements made in this report is a report released last Friday by Goldman Sachs, which stated that their equity portfolio allocation is shifting to a more defensive position. “The performance of short duration equities vs. long duration equities suggests that the equity market has not priced rate moves that have already occurred”, wrote Goldman Sachs strategist David Kostin. “Industrials” looks overvalued if earnings fall as much as expected, as are “Materials”. “Media and Entertainment” and “Autos and Components” are also at the bottom.