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Bullish Fund Flows Return With A Vengeance: Largest Equity Inflow In 6 Weeks; Money Put Into Bonds, Commodities
The bullish fund flows are back. This is how Bank of America summarizes the latest EPFR capital flow sentiment: "Loving Wall Street: $15bn equity inflows + $5bn HY/IG inflows + 6 straight weeks of commodity inflows = investors are "risk-on"
Specifically, a surge in equity:
- Equities: $14.6bn inflows (largest in 6 weeks) (note $12.3bn via ETFs – SPY, XLV, QQQ)
- Bonds: $2.9bn inflows (3 straight weeks)
- Commodities: 6 straight weeks of inflows ($0.3bn) (longest inflow streak in 8 months)
Virtually all the equity inflows were via ETFs:
Here Comes the Fed: Treasury funds record largest outflows in 17 weeks ($1.8bn) + bank loans record first inflows in 13 weeks = investors discounting Dec Fed hike
The Need for Yield: largest HY bond inflows in 8 months ($3.9bn); even retail-popular high-yielding MLP see inflows (investors redeemed $1.2bn from Jun-Sep’15); but once again, EM debt saw outflows
- $3.9bn inflows to HY bond funds (3 straight weeks) (largest in 8 months in absolute terms)
- $1.8bn outflows from Govt/tsy funds (3 straight weeks) (largest in 17 weeks); Largest inflows to IG bond funds in 12 weeks ($1.2bn)
- $0.4bn outflows from EM debt funds (outflows in 13 out of 14
Like with equities, the bulk of the inflows in IG were via ETFs:
Europe & EM in Vogue: largest EM inflows in 16 weeks ($1.3bn); EU inflows in 22 out of past 24 weeks (another $3.2bn inflows this week, huge YTD inflow $106bn)
- Europe booming: largest inflows in 8 weeks ($3.2bn) (inflows in 22 out of past 24 weeks)
- Japan snaps back: $0.8bn inflows (2 straight weeks)
- EM: $1.3bn inflows (largest in 16 weeks)
- US: $7.8bn inflows (largest in 6 weeks & all via ETFs)
Biggest winners YTD: APAC equities (read Japan), Healthcare (despite sell-off), IG bonds, European equities (Chart 1)
Biggest losers YTD: industrials, LatAm equities, utilities, EM debt ($-denominated), EEMEA equities (Charts 4-5)
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frontrun to qe4 bitcheez!
Not so obvious a bet to place, at least for near term. Fed failure to raise in Dec could tank its credibility and markets may fall in response. Or Fed raise in Dec could drop markets thinking QE is over.
im all in on no raise. they can't. math...
rates must go lower by buying bonds with qe.
history repeats for continued solvency...
what balance sheet? ha
Wait for the pot to fill up. Let it boil. Pour it into the tub. Fill back up.....
Repeat until you run out of water.
Then the pot melts on the fire.
thank gawd. The bag-holders are finally here. Now we can raise the curtain on the last act "In which Harry gets his oats".
I did I miss my chance to buy the fucking dip?
Oh well, might as well go all in at the all time high.