Everyone’s bullish. Even the bears are long.
And why not, right? The GOP just made good on their pledge to deliver a corporate tax cut by the end of 2017 (and God knows a corporate tax cut is definitely what every middle class family asked Santa for this year), the ubiquitous “Goldilocks” narrative that serves as the foundation for everyone’s bullish 2018 forecasts is intact, and it kinda seems like Trump will sooner pull a Xi Jinping and make selling illegal before he’ll risk an equity drawdown.
That said, no one would blame you for taking some profits ahead of the holidays. After all, the crypto crowd sure is.
Well guess what? We just got the largest outflow from U.S. equity funds and ETFs since the aftermath of the 2015 yuan deval.
“Outflows from US equity funds and ETFs reached $17.47bn this past week — the highest weekly outflow since September 2015,” BofAML writes citing EPFR. Here’s the visual:
And while profit taking makes a lot of sense here, that’s not how “dumb” money usually behaves.
“This is unusual, as flows typically follow returns, and the outflows in September and August 2015 in fact followed an earlier correction in stock prices,” BofAML goes on to note.
Who knows, maybe folks spent last week selling their stocks and plowing the proceeds into Bitcoin. If that’s the case, it hasn’t worked out so well.
You need a chart for previous five years for Dec. US equity sells vs. buys to clarify your claim. Otherwise end-of-year portfolio adjustments for taxes clouds Dec. market directions – as I’m sure you are aware.
Yeah, you can’t judge anything by sales the last couple of weeks of the year. Let’s reconvene until this time next month. You’ll have something serious to ponder, if it’s still the case at the end of January.
The word “sales” should have been “selling.”
Also, “until” should have been “at.”
Would you believe me if I told you I let my proofreader leave early for the holidays?
LOL! ah, blame it on the eggnog!