U.S. investors continued to pump money into equity funds in the seven days to July 24, shrugging off a technology sector selloff to focus on robust corporate earnings and the possibility of upcoming Federal Reserve interest rate cuts.
According to LSEG data, investors acquired U.S. equity funds worth $5.7 billion during the week, following $21.7 billion net purchases in the prior week.
The companies including Coca-Cola (NYSE: KO), Spotify Technology (NYSE: SPOT), and AT&T (NYSE: T) reported upbeat results, with the second quarter earnings season well underway. Of the 201 S&P 500 companies that have reported earnings so far, 79% beat the consensus net income estimates, LSEG data showed.
However, megacap tech names – Tesla (NASDAQ: TSLA) and Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) reported lackluster earnings, extending the technology stocks slump into a second week.
According to recent data, U.S. large-cap funds attracted $9.1 billion in net inflows, down slightly from $10.34 billion the previous week. Meanwhile, multi-cap funds saw inflows of $136 million, contrasting with mid-cap funds which experienced outflows of $684 million.
Meanwhile, U.S. small-cap funds drew just $84 million compared to $8.67 billion worth of net purchases a week ago.
Investors, however, sold $1.52 billion worth of sectoral funds as they exited tech, industrials, and metals & mining funds to the tune of $1.2 billion, $540 million, and $533 million, respectively. Conversely, financials gained $911 million in inflows.
U.S. bond funds garnered $5.05 billion of inflows during the week, the eighth week of net purchases in a row.
General domestic taxable fixed-income funds remained popular for an eighth week as they secured a massive $2.31 billion. Municipal, mortgage funds, and short/intermediate government and treasury funds also saw $887 million, $884 million, and $710 million worth of net purchases.
Money market funds, meanwhile, faced $26.56 billion worth of outflows after three weekly net purchases in a row.
(Source: Reuters)
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
