Massive outflows from U.S. equity funds this week

Massive outflows from U.S. equity funds this week 981 980 Realm

Back in July we published a post entitled Some Numbers to Bear in Mind in which discussed a particular Market Sentiment Indicator and how it was indicating an extreme reading at that time. As detailed in the post, U.S. Equity Fund outflows in the week to 4th July (arrow on chart below) were -$8.3 Billion, and a summated net flow over four weeks to that date reached a negative -$39.3 Billion. We said >>this is worth mentioning because it is an extreme outflow indicating some real fear from retail investors…this is a contrarian indicator – extreme negative sentiment like this is more typically seen at market lows than highs.<< Following that reading in July the S&P500 rallied 7% into the September high.

Now we view the latest data from www.lipperusfundflows.com and see that in the week to 12th December there has been Equity Fund (inc ETF) outflows of -$46.2 Billion. The largest single weekly outflow in a year very often occurs in December but this week’s number is massive. I’ve been writing recently that no obvious capitulation has been seen in this indicator but this week’s outflow takes the 4wk flow number down to -$54.57 Billion, a new extreme low.

US equity fund flows

US equity fund flows


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