More upside possible for stocks even with 'FOMO' positioning - Barclays

MORE UPSIDE POSSIBLE FOR STOCKS EVEN WITH 'FOMO' POSITIONING - BARCLAYS

The fear of missing out - FOMO - has seen investor positioning in equities inch higher across in June, says Emmanuel Cau, head of European equity strategy at Barclays, but high positioning doesn't mean that more upside is out of the question.

Equities reached new record highs in the U.S. and Europe in June. The STOXX 600 SXXP is up about 3.2% since the beginning of May.

"Long only equity inflows were led by the US, while political tail risks led to outflows in EU/France," said Cau in a note.

There could be more room for a rally, even though election cycles typically come with stalling inflows, buyback blackout periods are about to start, and negative late summer seasonality in August/September looms, Barclays says.

"However, with global activity data holding up and resilient earnings, equity flows remain fundamentally supported for now," says Cau.

Lower rates also might mean more cash moving into stocks.

French election jitters are fuelling inflows into the U.S. but no Europe exodus, says Barclays.

"...despite some selling of French equities, inbound flows from US to Europe remain positive, and the first ECB rate cut has prompted inflows to return to EU SMIDs."

UK domestic stocks are seeing inflows too, Cau says.

(Lucy Raitano)

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