US fund investors ignored ostensibly positive signals on trade and monetary policy during the latest week, pulling the most cash from stocks in six weeks, according to Investment Company Institute (ICI) data on Wednesday. Nearly $6.4 billion tumbled out of stocks and another $3.5 billion from bonds during the week ended Nov. 28, the ICI said. The trade group's data covers US-based mutual funds and exchange-traded funds (ETFs).
During the week, the benchmark S&P 500 stock index was helped 3.6 percent higher by remarks by US Federal Reserve Chair Jerome Powell that interest rates are near levels estimated to neither brake nor boost the economy. That statement is a fact, but its emphasis by the Fed chair was taken by investors as a signal the Fed could slow rate hikes, helping stocks.
The market also smiled on comments by White House economic adviser Larry Kudlow that a meeting between President Donald Trump and his Chinese counterpart, Xi Jinping, in Argentina on Saturday was an opportunity to "turn the page" on a trade war.
Market-friendly developments on trade and monetary policy were seen clearing important obstacles away from the equity market. But investors smarting from weaker returns across financial assets this year are showing increased caution about growth prospects going forward.
The average US-based stock fund was down 2.6 percent this year while the typical bond fund fell 1.3 percent, according to data from Refinitiv's Lipper research service late last month.
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