Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Consecutive Days of ETF Outflows Highlight Bond Sell-off, Equity Rout

Consecutive Days of ETF Outflows Highlight Bond Sell-off, Equity Rout

Peter Hanks, Strategist

Talking Points:

  • The TLT ETF saw $1.3 billion in outflows from October 1st to 4th, highlighting this week’s yield increase
  • Rising bond yields resulted in an equity rout as ETFs with domestic exposure saw modest inflows
  • Inflows suggest investors are attempting to ‘buy the dip’

The first week of October delivered a considerable amount of volatility to markets. ETF flows revealed investors ditched long-term US treasury holdings and allocated their capital to exchange traded funds with exposure to US indices like the S&P 500, Dow, and NASDAQ.

S&P 500 Hourly Price Chart October 2018

Since touching record heights on Wednesday, the S&P 500 found itself in trouble as the weekend approached. At the expense of equity bulls, a surprising rise in bond yields sent the major indexes lower. Typically, rising yields would suggest a ‘risk-on’ sentiment in the market sending equities higher. However, index pricing did not reflect this hypothesis.

Join our analysts for Live Webinars as they cover the interesting trends materializing in global markets.

20+ Year Treasury Bond (TLT) ETF Fund Flows Vs S&P 500 Price Chart

The chart above showcases days of consecutive outflows at a notable level. Since September 28th, each day saw funds leave TLT. In total, over $1.5 billion has exited the fund. Although this particular ETF does not reflect the whole treasury market, it is a useful barometer of sentiment. The bond sell-off unsurprisingly sent yields higher as demand slipped. Subsequently, the 10-year treasury yield hit 3.24%, the highest level in seven years.

Aggregate Fund Flows versus S&P 500 Performance

Looking to our usual weekly fund flow chart, the drop in equities does not seem to have impacted demand. During the same time period bonds were selling off, aggregate fund flows totaled $4.2 billion. The inflows are likely investors attempting to ‘buy the dip’ as they infer bullish sentiment from rising bond yields. Such an inference would not be misguided, given data released Friday revealed the lowest unemployment rate since 1969 and Wednesday saw the quickest growth in the service sector ever.

View our Economic Calendar for important data releases in the upcoming week.

At this time however, the typical correlation has not appeared so investors eager for return may find themselves troubled next week if market trends remain disjointed. Further, investors could be left without clarification next week given a pretty sparse economic calendar until Thursday’s US CPI and Friday’s University of Michigan sentiment report.

--Written by Peter Hanks, Junior Analyst for

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.