The stock market exodus is accelerating

Bank of America Merrill Lynch

The exit from the stock market is picking up speed.

The seven days that ended Wednesday saw the largest outflow from equity funds of any week in five months, according to Bank of America Merrill Lynch.

It also marked the seventh consecutive week of equity redemptions, the longest such streak since 2008.

That was driven by dramatic outflows in Europe, which saw $4.2 billion in outflows, the most since October 2014. US equity funds saw $6 billion in outflows.

The outflows are closer to capitulation levels, Bank of America's analysts write in a note. Capitulation is where cumulative outflows represent a significant chunk of total assets under management.

There have been $53 billion in outflows from equities over the past seven weeks, according to the note, ahead of the $36 billion in outflows during the August 2015 sell-off.

The cumulative outflows are approaching the bear-market levels set during the August 2011 debt-ceiling drama ($80 billion), the 2008 financial crisis ($85 billion), and the 2002 bear market ($65 billion).

Money is leaving the stock market and heading for safe assets, such as government-bond funds, which saw $1.6 billion in inflows, and precious-metal funds, which saw $1.6 billion in inflows.

Markets have bounced back in the past few days, though Bank of America argues that is the result of a "short squeeze in stocks and credit."

It added that cash levels were at their highest since November 2011, ahead of a "massive month of policy events," including meetings of the G-20, the European Central Bank, the Bank of Japan, and the US Federal Open Market Committee.

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