We have only seen this a few times in the past 15 years.
One Of The Worst Weeks Ever
November 8 (King World News) – Here is a portion of an extremely important note from Jason Goepfert at SentimenTrader: We’ve looked recently at how investors have been fleeing the bond market, and that has become even more evident with that latest release from the Investment Company Institute. The organization report that for the last week in October, investors pulled nearly $20 billion from bond mutual funds, the 3rd most in at least 15 years, far surpassing anything from before the last decade (see stunning chart below).
One Of The Worst Weekly Bond Outflows Ever!
Since funds like TLT are focused on Treasuries and the bond outflows were for all bond funds, TLT isn’t the best proxy. If we look at a fund like BND that encompasses the entire bond market, the flows make a little more sense. And we can see that when the outflows have been this heavy, the fund has tended to rally going forward. Granted, “rally” is the base case for BND over its history, but it has still suffered some extended periods of declines.
By the time investors decided to yank this much in a single week, those declines were about over. This should be a good sign for the bond market in general in the weeks and months ahead.
This is why Jason Goepfert is the best in the world at what he does — proving actionable market data. To subscribe or try a free two week trial to the internationally acclaimed work that Jason Goepfert produces at SentimenTrader CLICK HERE.
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