A cool $36 billion flowed into U.S.-listed ETFs during the week ending Friday, July 12, pushing year-to-date inflows above $406 billion.
U.S. equity ETFs pulled in the bulk of the weekly inflows as stocks continued to hit record highs, but fixed income ETFs also saw demand as rate cut expectations ticked higher following the latest inflation data.
The S&P 500 was up by almost 19% on a year-to-date basis on Friday. Investors cheered data which showed a smaller-than-expected increase in consumer prices last month.
The probability of a rate cut in September neared 90% after the CPI data came out, which also lent support to bond prices.
Small caps handily outperformed their large cap counterparts last week as investors rotated into cheaper stocks from the megacap stocks that have led this year’s rally.
The Invesco S&P 500 Equal Weight ETF (RSP) was also in high demand with weekly inflows of $1 billion. The daily return differential between RSP and SPY on Thursday—the day the CPI data came out—was the largest since 2020.
Still, despite there being some rotation from megacaps to smaller stocks, the tech giants that dominate the S&P 500 remain close to their all-time highs.
In other words, everything seems to be working all of a sudden—mega caps, small caps and everything in between.
Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.
