Record Equity Outflows – Caution Flag?

July 3, 2019 Off By Chuck

On the surface it seems the headline should be negative for stock prices when the amount of money flowing out of equity mutual funds and ETFs has reached a record. But, as you can see below, when outflows have reached these levels in the past (bottom pane), it has been followed by a strong upward, sustainable trend in US stock prices (top pane) soon thereafter.

While there are no guarantees equity outflows won’t continue, it looks as if we may be setting up for a further push higher for US stocks.