Stocks Get “Toppy” Investors Shovel In Cash

Stocks Get “Toppy” Investors Shovel In Cash

$DIA, $SPY, $QQQ

Stock market participants shoveled $8.2-B into stock ETFs (exchange-traded fund) over the week ended 28 October, the 3rd week of inflows for those funds and the most new money since mid-September.

The inflows into stocks followed a week dominated by central bank policymakers and earnings reports.

The Fed Wednesday confirmed the market’s expectations that it would keep the interest rates at Zero+ and kept a December rate hike a possiblility.

The Chinese central bank and the ECB noted they will consider stepping up economic stimulus.

Investors in ETFs are thought to represent the institutional investor, including hedge funds. Mutual funds are thought to represent retail investors.

But not all investors were ready to step up risk-taking in stocks.

The swift movement by US-based ETF buyers into stock funds such as the SPDR S&P 500 ETF and the PowerShares QQQ Trust came as investors also moved $15.7-B of new cash into money market funds seen as low risk. Those funds had lost $2.7-B to investor withdrawals the week before, according to the data.

Stock mutual funds, which are used extensively by retail investors, posted just $221-M in inflows. Across mutual funds and ETFs, nearly 80% of the new money in stocks went into funds focused on US domestic markets.

US major market indexes finish strong month on low note: DJIA -92.26 at 17663.54, NAS 100 -20.53 at 5053.74, S&P 500-10.05 at 2079.36

Volume: Trade was above average as over 1-B/shares changed hands on the NYSE with month-end action contributing to the increased volume.

• NAS 100 +6.7% YTD
• S&P 500 +1.0% YTD
• DJIA -0.9% YTD
• Russell 2000 -3.5% YTD

Have a terrific weekend.

Paul Ebeling

HeffX-LTN

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