So far in 2024, the S&P 500 index has hit 17 consecutive historical closing highs, and investors continue to remain optimistic. As of the week ending March 13th, US stock funds achieved net inflows for the third consecutive week.
According to data from the London Stock Exchange Group (LSEG), the net inflow of funds from US stock funds in the past week was $4.93 billion, the largest weekly inflow since February.
Investors have net purchases of US large, small, and mixed funds of $2.88 billion, $1.8 billion, and $771 million, respectively. However, medium-sized equity funds were net sellers of $584 million.
Technology stocks remain the most favored sector for investors, with inflows of $554 million, financial sectors of $389 million, and net outflows of $889 million for non essential consumer goods.
The inflow of funds into US bond funds slowed sharply to US $3.81 billion, compared with US $10.54 billion the previous week. The net inflow of money market funds for the third consecutive week was $24.07 billion.
The S&P 500 index hit a historic high of 5189.26 points last week and has risen more than 7% so far this year. Due to the higher than expected new round of inflation data released earlier, the US stock market experienced a slight pullback this week.
The US PPI rose 0.6% month on month in February, higher than economists expected by 0.3%. Prior to this, Tuesday's data showed that the year-on-year increase in CPI exceeded expectations.
The US inflation rate has exceeded expectations for the second consecutive month, which may prompt the Federal Reserve to strengthen its wait-and-see attitude towards rate cuts at next week's interest rate meeting. However, officials are still concerned about when to lower interest rates, rather than whether to raise them again. After the fastest round of interest rate hikes in 40 years, the inflation rate in the United States has significantly fallen from its 40 year high.
Rosengren, who served as the Chairman of the Boston Fed from 2007 to 2021, stated that Federal Reserve officials had predicted three rate cuts in 2024 at last December's meeting, and the Department of Labor's CPI report should not fundamentally change this expectation. Investors expect the Federal Reserve to initiate interest rate cuts in June this year.
Chris Whelan, Senior Strategist at Dow Securities, said, "The US stock market continues to ignore interest rate fluctuations. Despite the Federal Reserve's suppression of interest rate cuts in recent months, the S&P 500 index has still risen by 25% since its low point in October last year. In addition, this has been accompanied by a bull market in other assets, with gold and Bitcoin reaching new highs recently, which has attracted widespread attention."
In addition, during the week ending March 13th, global equity funds also received significant inflows, attracting $22.6 billion in funds.