U.S. Equity Flows Turn Negative Ahead of Christmas

Investing.com reported that U.S. equity flows turned largely negative in the week leading up to Christmas, as revealed by Citi on Thursday. Bond funds saw inflows of $2.1 billion while equity funds experienced outflows totaling $26.6 billion.

According to Citi, U.S. ETFs accounted for the majority of equity outflows, with $38.7 billion in net redemptions. In contrast, European funds experienced a smaller outflow of $0.9 billion, while global funds attracted inflows of $7.5 billion. In Europe, money market funds lost $11.7 billion last week, leading to a total outflow of $42.5 billion over the past three weeks.

Emerging market funds faced another challenging week, with $1.1 billion in outflows, primarily due to $1.3 billion exiting China funds for the second consecutive week. However, GEM (Global Emerging Markets) funds managed modest inflows of $0.7 billion.

In Asia, foreign investors were net sellers across most markets. South Korea observed $0.7 billion in net foreign outflows, while Taiwan and India recorded outflows of $0.5 billion and $0.4 billion, respectively. Japan also faced significant foreign selling, amounting to $3.1 billion in outflows for the week.

On Thursday, U.S. stocks moved marginally. The Dow Jones Industrial Average inched higher, marking its fifth consecutive session of gains, despite light trading and rising U.S. Treasury yields putting pressure on major tech stocks. The Nasdaq Composite and S&P 500 showed minimal movement, closing slightly lower, which ended the Nasdaq's four-day winning streak and halted the S&P 500's three-session rise.

With few market drivers, investors reacted to climbing U.S. government bond yields. The 10-year Treasury yield reached 4.64%, its highest level since May. However, a solid auction of seven-year notes in the afternoon eased yields slightly, lowering the 10-year yield to 4.58% by late afternoon.