Expectations of U.S. interest rate cuts boost strong inflows into global equity funds

According to foreign media reports on Friday (24th), global equity funds saw strong capital inflows in the week ended May 22, benefiting from optimism about slowing inflation and the expectation that the Federal Reserve (Fed) will cut interest rates in the second half of this year. expectations.

According to foreign media reports on Friday (24th), strong inflows into global equity funds in the week ending May 22 benefited from optimism about slowing inflation and expectations that the Federal Reserve (Fed) will cut interest rates in the second half of this year.
Global equity funds attracted $11.1 billion in inflows, a 22% increase from the previous week, according to Lipper data.
U.S. equity funds received the majority of inflows totaling $9.9 billion, European equity funds attracted $4.6 billion and Asian equity funds saw outflows of $4.3 billion.
Investors were generally optimistic this week, boosted by U.S. April inflation data, which suggested the U.S. economy had resumed its downward trend.
However, market sentiment weakened on Friday as global stock markets fell and strong U.S. economic data reinforced expectations that interest rates may remain high for an extended period.
There were also different moves in sector-specific funds with the mining and technology sectors seeing inflows of $449 million and $290 million respectively.
By comparison, the Industrials and Consumer Discretionary sectors each faced about $200 million in outflows.
At the same time, global bond funds also benefited, attracting $12 billion in funds, a significant increase from the previous week as investors expected continued strong demand for interest rate cuts.
Inflows to global high-yield bond funds surged to $3.2 billion while government bond funds attracted $1.2 billion.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: “Fixed income remains our preferred asset class and we favor high-quality bonds.
We expect high-quality bond yields to fall in the coming months as the market begins to price in a more convincing cycle of central bank rate cuts.
” On the other hand, money market funds also received $17.2 billion in inflows after experiencing outflows in the previous month.
As for the commodities sector, precious metals funds saw inflows increase by $407.4 million for the second straight week while energy funds faced net selling of about $150 million.
Emerging market funds performed strongly, attracting US$1.7 billion, the highest weekly inflow this year.
Notably, bond funds in these markets also continued to attract inflows, growing for a second straight week of $338 million.

Like (0)
Previous May 24, 2024 1:09 pm
Next May 24, 2024 1:09 pm

Related posts

  • German car giants oppose the EU\’s tax hike on Chinese cars, which may be counterproductive

    According to media reports including Reuters, BMW and Volkswagen executives warned against imposing EU import tariffs on electric vehicles from Chinese manufacturers. They argue that such measures could disrupt the EU\’s Green Deal agenda and negatively impact carmakers that rely on imports from China.

  • The Chinese Ministry of Foreign Affairs finally announced! Putin visits China on 5/16

    Chinese Foreign Ministry spokesperson Hua Chunying announced on Tuesday (14th) that at the invitation of President Xi Jinping, Russian President Vladimir Putin will visit China from May 16 to 17. This will be Putin’s first visit after his re-election, highlighting the importance of Russian relations.

  • Q2 revenue opens red and bottoms out for mainstream stocks

    As the first-quarter financial reports and April revenue are released one after another, stocks with outstanding performance are also favored by funds. If the second-quarter operations are expected to improve, the stocks are more likely to have longevity.[Text/Wu Minzhen] The first quarter financial report and April revenue of Taiwan listed companies are coming out one after another. During the peak season, short-term funds will also start to focus on performance-themed stocks, and if the second quarter operation is expected to be upward, the targets will also be attract more market attention.Looking further, there are many stocks that have achieved the strongest April revenue in history, such as Hon Hai, Yongxinjian, ADATA, Zhending KY, Yingwei, etc. The single-month performance has become the most popular focus in the same period.Funding highlighted the performance theme. Hon Hai\’s revenue in April was 5,108. 9.6 billion yuan, a monthly increase of 14. 2%, an annual increase of 19%. The revenue of its four major product lines, including computer terminal products, consumer smart products, components and other products, and cloud network products, has experienced both monthly…

  • Biden\’s approval rating drops! Rising inflation keeps U.S. voters from seeing economic improvement

    The recent rise in U.S. inflation appears to be reversing voter support for President Joe Biden, with 80% of respondents citing high prices as one of the biggest financial challenges, according to new polls.

  • Wall Street\’s leading bearish analyst throws in the towel and raises S&P 500 price target

    One of Wall Street\’s most prominent bear analysts has changed his stance on the outlook for U.S. stocks. Morgan Stanley chief U.S. equity strategist Michael Wilson now expects the S&P 500 to rise 2% by June 2025; he had previously seen the S&P falling 15% by December.

  • Toyota earns 5 trillion yen but predicts profit will shrink by 20% this year due to increased investment in electric vehicles and AI

    Japanese automobile giant Toyota announced its impressive quarterly financial results on Wednesday. The performance in the fourth quarter of fiscal year 2023 ended in March was better than expected, and the full-year profit and revenue reached a record high, with full-year profit of 5.35 trillion days. It is the first time that a Japanese company has exceeded 5 trillion yen. However, revenue in the 2024 fiscal year ending in March 2025 is expected to decline by 20% to 4.3 trillion yen, mainly because in order to strengthen technological innovation and maintain market competitiveness, the car manufacturer Actively invest in transformation.