U.S. equity funds post weekly outflows as investors lock in gains before jobs data

Traders Union
All News
Financial News
U.S. equity funds outflows before jobs data

Highlights

U.S. equity funds record net outflows of $1.58 billion in the week to August 5 as investors lock in gains ahead of jobs data.
Growth equity funds see $5.5 billion in net outflows while value funds attract $1.99 billion in net inflows, indicating a rotation within equities.
Bond funds pull in $6.52 billion and money market funds attract $55.69 billion, showing increased defensive allocations before the July payrolls report.

Fund flows shift before payrolls report

As reported by Reuters, citing LSEG Lipper data, investors pull a net $1.58 billion from U.S. equity funds in the week to August 5, partly reversing the previous week's $11.77 billion in net inflows.

The change in flows comes after the S&P 500 rebounds about 6.5% from last week's low of 7,313.92 to a record high of 7,793.68 on Wednesday, supported by strong results from companies including Amazon, Caterpillar and Palantir Technologies.

Investors are awaiting the U.S. Labor Department's July employment report for clues on the interest-rate outlook. Economists expect payrolls to rise by 80,000 in July after a 57,000 gain in June, while the unemployment rate is forecast to hold at 4.2%.

Within equities, U.S. growth funds record net outflows of $5.5 billion during the week, more than offsetting the $3.1 billion in inflows seen a week earlier. Value funds, however, attract net purchases of $1.99 billion.

Bond and cash allocations gain support

Sector fund buying also eases to a three-week low of $1.62 billion, with net purchases of technology funds falling to a six-week low of $388 million.

Industrials, healthcare and consumer discretionary funds still draw notable inflows of $875 million, $866 million and $708 million, respectively, showing selective demand even as broader equity allocations weaken.

U.S. bond funds attract net weekly inflows of $6.52 billion, strengthening from $1.26 billion the previous week. Short-to-intermediate investment-grade funds, short-to-intermediate government and Treasury funds, and municipal debt funds lead fixed-income demand with net purchases of $2.05 billion, $1.3 billion and $1.15 billion, respectively.

Money market funds also regain favor, pulling in $55.69 billion after three straight weeks of outflows, indicating investors are raising defensive and liquid positions ahead of key economic data.

Our earlier coverage of diverging July nonfarm payroll forecasts highlighted how uncertainty around job growth and an unemployment rate near 4.2% could trigger outsized market swings once the data prints. We also noted that mixed signals from jobless claims and private payroll estimates were complicating expectations and keeping attention on what the report could mean for the Fed’s rate path.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.