Merrill Lynch ‘sell’ signal triggered as market faces more losses ahead

Investing


What’s triggering the near-term concern, though, is another surge in cash both to mutual and exchange-traded funds.

Stock-focused funds took in another $25.7 billion for the week ended Wednesday. ETFs saw the bulk with $22.4 billion, but active mutual funds again saw positive inflows, at $3.4 billion. Together, the funds have seen investors pour in $102.7 billion already in 2018.

Despite the continued run into equities, bond funds also saw another positive week, taking in $5.7 billion for a year-to-date tally of $37.7 billion.

The trends are all part of a big start to the year for ETFs, which took in a record $79 billion in January, including $42 billion to U.S. stock funds, according to Citigroup.

Stocks, however, are in a rut, with the Dow industrials seeing losses cross 2 percent for the week in early Friday trading. The index was off more than 300 points in the first half-hour of trading Friday.

Despite the pullback, it’s been a great run for the market as the Dow has gained more than 31 percent over the past year.

Such pullbacks aren’t unusual in a hot market, and many leading market strategists expect 2018 to be a volatile period overall.

Investors, thus, have been spreading money around. Within the big surge to stock funds, emerging markets took in $7.8 billion and Japan attracted $2.4 billion in fresh money, though the U.S. continued to lead with $11.1 billion, the biggest influx in 33 weeks, according to BofAML.

In style, large-caps dominated with $13.2 billion. Sectorwise, tech and financials took in $1.3 billion apiece.

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