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.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • Trump says agricultural purchases by China has begun #Tradewar #Corn #Soybean
  • President Trump suggests he may not sign the 'phase one' trade deal with China announced this past Friday until he meets President Xi in Chile at the APEC meeting
  • #EUR: There was a ‘nexus’ of confluence at this zone as a bearish trendline that held the highs in the pair from July into last week intersected with the support side of a bear flag formation.Get your $EUR technical analysis from @JStanleyFX here: https://t.co/DO5rw4aBtA https://t.co/lsWxg43lRC
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.64% Gold: 0.27% Silver: -0.47% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/YT16FlZATs
  • 🇺🇸 (USD) Business Inventories (AUG), Actual: 0.0% Expected: 0.2% Previous: 0.3% https://www.dailyfx.com/calendar?utm_source=Twitter&utm_medium=TweetRobot&utm_campaign=twr
  • 🇺🇸 (USD) NAHB Housing Market Index (OCT), Actual: 71 Expected: 68 Previous: 68 https://www.dailyfx.com/calendar?utm_source=Twitter&utm_medium=TweetRobot&utm_campaign=twr
  • After last week's hiatus, I'll be going live in 50 minutes for my weekly equity webinar. Among other things, we'll discuss #earningsseason and levels to watch for $NFLX ahead of its report later today Join here - https://www.dailyfx.com/webinars/782324475
  • RT @ecb: Speech Philip R. Lane: The economic outlook for the euro area https://t.co/Aa0wKT97OR (slides from the presentation)
  • RT @LiveSquawk: ECB’s Lane: Euro Area Faces More Extended Slowdown https://t.co/0TumxJQWQO
  • Tune in to @PeterHanksFX 's #webinar at 11:00 AM ET/3:00 PM GMT as he discusses levels to watch ahead of the Fed on #DJI & #DAX30. Register here: https://t.co/Rwbt9avERj https://t.co/9tZUtXkyNV
S&P 500: Best Q1 Since 1998 Despite ETF Outflows

S&P 500: Best Q1 Since 1998 Despite ETF Outflows

2019-03-29 19:30:00
Peter Hanks, Junior Analyst
Share:

Stock Market Talking Points:

  • SPY, IVV, and VOO shed capital during the S&P 500’s best quarter in nearly ten years
  • Elsewhere, government debt ETFs saw demand that reflects the recent yield curve inversion
  • Interested in equities and ETF fund flows? Sign up for the weekly webinar - Stock Market Catalysts for the Week Ahead

S&P 500: Best Q1 Since 1998 Despite ETF Outflows

The S&P 500 looks to cap off this week – and the first quarter – with a marginal increase from the prior session but large enough to solidify the best quarterly performance for the index since Q3, 2009 around 12.50%. Compared exclusively to other first quarters, Q1, 2019 offered the highest return since Q1, 1998.

S&P 500 Quarterly Returns (Chart 1)

S&P 500 quarterly performance

Learn tips and tricks to day trading the S&P 500

Despite the stellar quarterly return, the aggregate fund flows from SPY, IVV and VOO recorded an outflow of $1.6 billion during the period, assisted by the largest intraday outflow for the funds ever. It is also worth noting that the majority of inflows were recorded in the second half of the quarter, specifically during March which saw $9.1 billion in inflows.

Aggregate Fund Flows of SPY, IVV and VOO ETFs (Chart 2)

Please add a description for the image.

February saw $2.9 billion in net inflows while January notched a rather painful $13.6 billion in outflows following December’s rout. It appears many investors were hesitant to buy into the recovery rally until it was well underway.

Exchange Traded Funds and the Yield Curve Inversion

Elsewhere, fund flows offered further evidence for the recent yield curve inversion. The BIL ETF – which grants exposure similar to that of 1-3 month treasury bills – saw $146 million in inflows this week. Interestingly, the fund recorded net outflows of $617 million for the quarter with consistent outflows during January and February.

BIL ETF Fund Flows (Chart 3)

S&P 500: Best Q1 Since 1998 Despite ETF Outflows

On the other hand, funds that grant exposure to longer-term treasuries recorded outflows this week as the yield curve inverts further. The TLT ETF saw net outflows reach $175 million for the week, nearly a perfect contrast to the inflows into BIL. For the quarter, TLT saw $775 million in fresh capital.

TLT ETF Fund Flows (Chart 4)

S&P 500: Best Q1 Since 1998 Despite ETF Outflows

The contrasting performances potentially reflect the type of demand behind the flows throughout the quarter. In January - when investors were wrestling with the recent rout and seeking relative safety - both short and long-term government debt ETFs recorded inflows.

As the quarter progressed, shorter-term debt was cast aside while TLT saw continued demand amid global growth uncertainty and an uncertain outlook for the S&P 500. Since the March FOMC meeting, TLT has seen $536 million in outflows while BIL recorded $256 million in inflows, reflecting the lack of upside in exposure to longer-term debt as futures markets begin to price in a cut to the Federal Funds rate range in 2020 and uncertainty about the future grows.

As the record first quarter draws to a close, the outlook for the second is muddied with conflicting themes. Should the yield curve inversion strengthen, investors may continue the current trend in BIL and TLT. Elsewhere, the three broad-market tracking funds could witness deeper outflows as investors look to shift capital allocation out of the S&P 500 in its tenth year of a bull-run. That being said, relatively high correlations in other markets present ample trading opportunities in the coming quarter.

Read more: Will the Stock Market Crash in 2019?

--Written by Peter Hanks, Junior Analyst for DailyFX.com

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.

DISCLOSURES

News & Analysis at your fingertips.