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S&P 500, Emerging Markets & Gold Forecast:

  • Risk assets, particularly the emerging market ETF EEM, remain pressured as investors seek relative safety in investments like gold[1]
  • Since August 1, the SPY ETF has seen -$11 billion leave its coffers whereas January 1 to July 31 saw just -$8.5 billion exit the fund
  • Sign up for our Free Weekly Equity Webinarfor more ETF data and analysis of the major themes impacting global stock markets from the Dow Jones to the DAX 30[3][4][2]

Investors Ditch SPY & EEM ETFs for Gold as Uncertainty Persists

The S&P 500[5] is in the midst of yet another incredible Friday rally, trading 1.4% higher at the time of this article’s publication. While price action would suggest a rejuvenated appetite for risk across markets, ETF flow data suggests a somewhat disjointed relationship between price and conviction as traders ditch assets like the S&P 500 and emerging markets while “safer” assets see consistent demand. [6]

Funds Fly from SPY

SPY ETF price chart

Data source: Bloomberg

To that end, investors appear to have accelerated their flight from the S&P 500-tracking SPY ETF in August. In the year-to-date, the ETF has seen nearly -$20 billion exit the fund but -$11 billion of the capital has left in August alone – compared to the -$8.5 billion that fled in the first 7 months of the year. The combination of an uncertain Fed and an unexpected escalation in the US-China trade war worked to shock capital markets as evidenced by elevated volatility across most assets. Shortly thereafter, the inversion of yet another US yield curve has contributed to deeper fear as recessionary signals mount. [7]

HYG Demand Subsides

HYG ETF price chart

Data Source: Bloomberg

The concern derived from a

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