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$9B ETF flip-flop shows unease over stocks

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Sept. 10, 2018. Stocks held early gains even as shares of Apple and Asia-based suppliers slumped after President Donald Trump insisted his trade war with China will spur more manufacturing jobs in the U.S. Photographer: Michael Nagle/Bloomberg
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Investors can’t seem to make up their minds on whether U.S. stocks are headed for new highs — or poised for a correction.

Traders poured almost $5 billion into the Vanguard S&P 500 ETF (VOO) on Friday, the biggest one-day inflow for the $138 billion fund since its inception in 2010, data compiled by Bloomberg show. But just three days after that vote of confidence, more than $3.7 billion exited the $307 billion SPDR S&P 500 ETF Trust (SPY), which follows the same broad index of large American companies.

A flight to safety that saw ETFs of short-term bonds and utilities add cash as coronavirus dominated headlines has given way to a vigorous rally. Stocks jumped Tuesday, augmenting the best two-day surge for the S&P 500 since October, while 10-year Treasury yields climbed the most in almost two months. That has investors struggling to decide whether they want to sit on the sidelines or go all-in.

More than half of them track the industry’s top-performing category.
December 18

“The best days occur near the worst days,” said Michael Antonelli, market strategist at Baird. “Macro shocks such as a pandemic can have a dramatic impact on the market but, if we used history as a guide, the impact is usually limited to the early stages.”

The S&P 500, which both VOO and SPY track, rose 1.6% as of 1:25 p.m. in New York on Tuesday. The gauge is about 1% off a record, after sliding almost 4%.

Bloomberg News