Global stock market funds have been withdrawn for two consecutive weeks, but the rate cut expectations have become a "calming pill"! Safe-haven funds are pouring into bonds and gold

According to the information from Zhitong Finance APP, global investors net sold stock funds for the second consecutive week ending September 11th, mainly due to concerns about the health of the U.S. economy and political uncertainty ahead of the U.S. presidential debate. However, the market's optimistic expectations of a possible interest rate cut by central banks have eased the outflow of funds.

Data from the London Stock Exchange shows that the net redemption of global stock funds this week was $3.46 billion, down from $4.96 billion the previous week. Last week, global stock markets experienced selling pressure as U.S. economic data indicated a slowdown, but with the European Central Bank cutting interest rates and market expectations of a 50 basis point rate cut at the upcoming Federal Reserve meeting, global stock markets rebounded by over 2% this week.

In terms of regional distribution, U.S. stock funds saw a net outflow of $7.82 billion last week, down from $11.54 billion the previous week. Meanwhile, Asian and European funds attracted inflows of $2.91 billion and $0.793 billion, respectively.

Barclays Global Research Chairman Ajay Rajadhyaksha pointed out in a report that due to the global trend of interest rate cuts and low unemployment rates, they are more inclined towards global stocks rather than fixed income products. However, he also mentioned that investors may temporarily adopt a wait-and-see attitude, awaiting further clarity on the results of the U.S. presidential election.

In terms of sectors, the technology sector saw outflows of $1.97 billion in the week ending September 11th, the largest since November 2023. Financial stocks also experienced outflows of $1.53 billion. In contrast, consumer staples and utilities stocks attracted inflows of $1.12 billion and $0.878 billion, respectively.

Driven by risk aversion sentiment, money market funds and government bond funds saw inflows of $21.67 billion and $4.14 billion, respectively, this week. Global bond funds attracted funds for the 38th consecutive week, with net inflows reaching $11.81 billion, of which short-term funds and high-yield funds received inflows of $3.12 billion and $1.5 billion, respectively Figure 3

Gold and other precious metal funds have remained attractive for the fifth consecutive week, with a net purchase amount of $472 million, while inflows into energy funds have also increased by $150 million.

Data on emerging market funds shows that stock funds have seen outflows for the 14th consecutive week, totaling $1.05 billion, while bond funds have seen inflows for the 12th consecutive week, totaling $567 million.

Figure 4