Smart Money Sells As Rates Pick Up
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Jason Goepfert
Published: 2018-04-20 at 11:35:51 CST
This is an abridged version of our Daily Report.
Smart money keeps selling
The Smart Money Flow Index is not improving, as late-day sellers continue to show up. Assuming that means large, “smart” money managers are getting out (an iffy conclusion), it’s a warning sign.
The only time in 35 years it was this bad with stocks so near a high was in 2000.
Backup in yields has hurt stocks
Bond yields have risen substantially in the past three weeks and are near a multi-year high. That has caused trouble for stocks in the past, with the S&P struggling over the next two months. Bond yields themselves have usually continued to rise.
Staples aren’t very stable
The Optimism Index on XLP fell below 8 due to Thursday’s large loss, and the fund is not looking good.
Rate troubles
Perhaps due to concerns about rising rates, investors yanked money from rate-sensitive funds heading into Thursday. ETF outflows were dominated by Financials (XLF) and bond funds (LQD, HYG, and JNK).
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