- US equity futures saw net selling of $21 billion last week, concentrated in S&P 500 and Nasdaq 100 contracts on Friday.
- Equity ETF inflows of $26.8 billion more than offset the futures outflows, while fixed income ETFs also drew strong demand.
- Commodities and some emerging market funds experienced redemptions, but investors maintained long positioning in equities despite volatility.
Flows Show Resilience
US equity futures faced significant selling pressure last week, with JPMorgan estimating net selling of around $21 billion (JPM), particularly in S&P 500 and Nasdaq 100 contracts on Friday. However, the broader market demand proved resilient, as ETF inflows into equities totaled roughly $26.8 billion, more than offsetting the futures outflows. Fixed income ETFs also attracted strong demand, indicating a continued search for liquidity and diversified yields amid market turbulence.
Sector Rotation Continues
Investors rotated across sectors, maintaining long positioning in equities despite the recent volatility. The divergence between futures selling and ETF buying suggests that while some traders reduced exposure, others saw the dip as a buying opportunity. Commodities and several emerging market funds saw redemptions, reflecting a cautious stance on riskier assets.
Implications
The ability of ETF inflows to absorb futures selling highlights the structural demand for US equities, supported by expectations of a favorable macro backdrop. However, sustained volatility could test this resilience. Fixed income strength may reflect defensive positioning ahead of potential policy shifts.