S&P 500 Forecast: Fund Flows Reveal Tech, Treasury and Gold Weakness

S&P 500 Price Outlook:

• The QQQ ETF has seen net outflows in 2021 as the Nasdaq 100 looks to regain its shine
• ETF data reveals investors are still hesitant to maintain gold exposure
• What is an ETF? All you Need to Know About Exchange Traded Funds

S&P 500 Forecast: Fund Flows Reveal Tech, Treasury and Gold Weakness

The S&P 500, Nasdaq 100 and Dow Jones have been subjected to considerable volatility to start the month as each index negotiates either fundamental headwinds or technical levels of note. While US Treasury yields have slowed their ascent, ETF flows reveal investors are still hesitant to pile into some of the recently weak areas of the market like tech stocks, US Treasuries and gold.

Nasdaq-Tracking ETF Sees Outflows on Average

To that end, exchange traded fund flow data reveals withdrawals from the Nasdaq-tracking QQQ ETF continue to outpace inflows although recent sessions have seen investors wade back into the fund. In the year-to-date, however, QQQ has seen nearly $3.2 billion leave its coffers. The index has gained nearly 3% in the same period, but further demand might be required before the Nasdaq 100 can look to continue its upward trajectory over the longer-term.

Investors Test the Waters in US Treasury-Tracking ETFs

Exchange traded funds that track US Treasuries are in a similar situation. Outflows have vastly outpaced inflows in the year-to-date and recent sessions have seen the trend reverse somewhat. Still, the 20-day moving average remains negative even as US Treasury yields tread water around recent levels.

Gold Continues to Clock Outflows as Losses Mount

While tech stocks and US Treasuries show signs their fortunes might soon shift, gold continues to see losses mount. Perhaps unsurprisingly, the GLD ETF has endured a cataclysmic wave of withdrawals as more than $6.2 billion has been pulled from the fund in the year-to-date. While a pop higher in the shorter-term might materialize as gold looks to consolidate recent losses, the consistent stream of outflows might suggest gold will continue lower in the longer-term.

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--Written by Peter Hanks, Strategist for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX