Optimism lifts US stock funds for a fifth straight week

U.S. equity funds attracted $8.85bn in net inflows in the week ended November 4, marking the fifth consecutive week of inflows, as the major U.S. stock indexes rose, optimism about strong economic growth and expectations of a third consecutive rate cut by the Federal Reserve this month, according to LSEG data. The net inflows were down from about $11.8bn in the previous week. The Federal Reserve's beige book showed that economic activity expanded modestly in most parts of the US since the beginning of October. Meanwhile, market participants were preparing for a possible rate cut later in the month. The CME's "FedWatch" tool showed that the market currently expects a 66.7 per cent probability of a 25bp rate cut this month. In addition, U.S. large-cap funds attracted $6.6bn in net inflows, the highest level in three weeks; U.S. small-cap and multi-cap funds attracted $2.59bn and $585m in net inflows, respectively. By sector, technology funds suffered a net outflow of $914m and healthcare funds suffered a net outflow of $538m. U.S. bond funds attracted $3.7bn in net inflows, the lowest level in six weeks. U.S. money market funds attracted $121.34bn in net inflows, the largest weekly net inflows since April 2020.