Technology Select Sector SPDR Fund

ETFs are on pace to break record annual inflows, but this wild card could change it all

[ad_1]

Exchange-traded fund inflows have already topped monthly records in 2024, and managers think inflows could see an impact from the money market fund boom before year-end.

“With that $6 trillion plus parked in money market funds, I do think that is really the biggest wild card for the remainder of the year,” Nate Geraci, president of The ETF Store, told CNBC’s “ETF Edge” this week. “Whether it be flows into REIT ETFs or just the broader ETF market, that’s going to be a real potential catalyst here to watch.”

Total assets in money market funds set a new high of $6.24 trillion this past week, according to the Investment Company Institute. Assets have hit peak levels this year as investors wait for a Federal Reserve rate cut.

“If that yield comes down, the return on money market funds should come down as well,” said State Street Global Advisors’ Matt Bartolini in the same interview. “So as rates fall, we should expect to see some of that capital that has been on the sidelines in cash when cash was sort of cool again, start to go back into the marketplace.”

Bartolini, the firm’s head of SPDR Americas Research, sees that money moving into stocks, other higher-yielding areas of the fixed income marketplace and parts of the ETF market.

“I think one of the areas that I think is probably going to pick up a little bit more is around gold ETFs,” Bartolini added. “They’ve had about 2.2 billion of inflows the last three months, really strong close last year. So I think the future is still bright for the overall industry.”

Meanwhile, Geraci expects large, megacap ETFs to benefit. He also thinks the transition could be promising for ETF inflow levels as they approach 2021 records of $909 billion.

“Assuming stocks don’t experience a massive pullback, I think investors will continue to allocate here, and ETF inflows can break that record,” he said.

Disclaimer

[ad_2]

Source link

September 7, 2024

Analyst Dan Ives sees tech stocks gaining another 15% in the second half, led by these A.I. plays

[ad_1]

[ad_2]

Source link

June 26, 2023

CNBC Daily Open: Farewell for now, default fears

[ad_1]

The US Treasury Department building is seen in Washington, DC, January 19, 2023.

Saul Loeb | Afp | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Progress on U.S. debt ceiling talks and a sign of health at one regional bank gave markets the confidence to rally Wednesday.

What you need to know today

Top U.S. leaders said the country will avoid a debt crisis. “I think at the end of the day we do not have a debt default,” House Speaker Kevin McCarthy told CNBC. President Joe Biden echoed that sentiment in remarks from the White House. “We’re going to come together because these is no alternative,” Biden said.

U.S. markets rose Wednesday as investors hoped U.S. lawmakers manage to reach a deal on the country’s debt ceiling. Asia-Pacific stocks traded higher Thursday on the back of that optimism. Japan’s Topix Index rose 1.1%, its third straight day of increase, as Japan’s trade deficit narrowed by almost half in April.

Microsoft CEO Satya Nadella told CNBC’s Andrew Ross Sorkin in a taped interview that society needs to come together to “mitigate the dangers” of artificial intelligence. But Nadella was also optimistic about AI’s impact: He thinks it’ll create new jobs and improve education.

PRO Traders expect the Federal Reserve to keep interest rates unchanged when it meets later in June. However, the central bank could enact a “substitute” hike that would keep monetary policy tight, according to Evercore ISI.

The bottom line

Progress on U.S. debt ceiling talks and a sign of health at one regional bank gave markets the confidence to rally Wednesday.

U.S. leaders from both sides of the political spectrum expressed hope that the country will avert a sovereign debt crisis, which could come in as little as two weeks, if U.S. Treasury Secretary Janet Yellen’s warning of a June 1 deadline comes true. Though neither Biden nor McCarthy offered concrete details on a deal, their comments were markedly more positive than those on Monday, when McCarthy told NBC News both sides are still “far apart.”

Adding to yesterday’s positive sentiment, regional bank Western Alliance reported that customer deposits have grown by more than $2 billion throughout the current quarter. Analysts and investors cheered the news. Shares of the bank jumped 10.2% and helped to lift the sector. PacWest, another regional bank, surged 21.7%, while the broader SPDR S&P Regional Banking ETF (KRE) rose 7.4%.

Technology stocks rallied yesterday, possibly because of diminishing fears of a debt crisis and positive sentiment from Tesla, which climbed 4.4% after the company’s shareholder meeting. The Technology Select Sector SPDR Fund (XLK) rose 1.2%, hitting a 52-week high for the third straight day.

Major stock indexes benefited from those rises. The Dow Jones Industrial Average closed 1.24% higher, the Nasdaq Composite added 1.28% and the S&P 500 rose 1.19%.

But the S&P might be too reliant on tech stocks, Mizuho warned. Simply put, without Big Tech stocks, the S&P 500 would be down for the year. That implies that if Big Tech experiences a downturn — as it did last year — then the S&P would tumble pretty quickly.

Still, the future is bright for now. Goldman Sachs’ Senior Strategist Ben Snider told CNBC AI could increase the profits of S&P companies by 30% — with technology sector being the immediate winner. Fears averted for another day.

Subscribe here to get this report sent directly to your inbox each morning before markets open.

[ad_2]

Source link

May 17, 2023

CNBC Daily Open: Goodbye for now, default fears

[ad_1]

The south facade of the White House in Washington DC, United States on April 21, 2022.

Yasin Ozturk | Anadolu Agency | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Progress on U.S. debt ceiling talks and a sign of health at one regional bank gave markets the confidence to rally Wednesday.

What you need to know today

Top U.S. leaders said the country will avoid a debt crisis. “I think at the end of the day we do not have a debt default,” House Speaker Kevin McCarthy told CNBC. President Joe Biden echoed that sentiment in remarks from the White House. “We’re going to come together because these is no alternative,” Biden said.

UBS expects to incur $17 billion in costs from its emergency takeover of Credit Suisse. However, UBS also expects to gain $34.8 billion from “negative goodwill,” which refers to the acquisition of assets at a price below what they’re worth.

Microsoft CEO Satya Nadella told CNBC’s Andrew Ross Sorkin in a taped interview that society needs to come together to “mitigate the dangers” of artificial intelligence. But Nadella was also optimistic about AI’s impact: He thinks it’ll create new jobs and improve education.

PRO Traders expect the Federal Reserve to keep interest rates unchanged when it meets later in June. However, the central bank could enact a “substitute” hike that would keep monetary policy tight, according to Evercore ISI.

The bottom line

Progress on U.S. debt ceiling talks and a sign of health at one regional bank gave markets the confidence to rally Wednesday.

U.S. leaders from both sides of the political spectrum expressed hope that the country will avert a sovereign debt crisis, which could come in as little as two weeks, if U.S. Treasury Secretary Janet Yellen’s warning of a June 1 deadline comes true. Though neither Biden nor McCarthy offered concrete details on a deal, their comments were markedly more positive than those on Monday, when McCarthy told NBC News both sides are still “far apart.”

Adding to yesterday’s positive sentiment, regional bank Western Alliance reported that customer deposits have grown by more than $2 billion throughout the current quarter. Analysts and investors cheered the news. Shares of the bank jumped 10.2% and helped to lift the sector. PacWest, another regional bank, surged 21.7%, while the broader SPDR S&P Regional Banking ETF (KRE) rose 7.4%.

Technology stocks rallied yesterday, possibly because of diminishing fears of a debt crisis and positive sentiment from Tesla, which climbed 4.4% after the company’s shareholder meeting. The Technology Select Sector SPDR Fund (XLK) rose 1.2%, hitting a 52-week high for the third straight day.

Major stock indexes benefited from those rises. The Dow Jones Industrial Average closed 1.24% higher, the Nasdaq Composite added 1.28% and the S&P 500 rose 1.19%.

But the S&P might be too reliant on tech stocks, Mizuho warned. Simply put, without Big Tech stocks, the S&P 500 would be down for the year. That implies that if Big Tech experiences a downturn — as it did last year — then the S&P would tumble pretty quickly.