Tech exodus

Bloomberg pointed out that investors seem to be nervous ahead of a big week of tech earnings. The QQQ fund just suffered a record outflow over a 5-day period.

Its assets under management (AUM) have exploded over the years, so the outflow as a percentage of total assets barely registers, at just beyond -3%.

Fund flows are assumed to be a contrary indicator, but the historical evidence is mixed. Sometimes they are, but it depends on the fund and just how much of an extreme we're seeing. For QQQ, the first outflow of 3% or more of assets in at least the past few months mostly preceded weak returns over the next week or so, but fairly strong after that.