Market Commentary — March 15, 2021
Stocks rebounded back into record territory last week as the Labor Department’s CPI report on Wednesday reassured investors that inflation was benign. The rest of the week’s data was also upbeat: jobless claims fell, there was continued progress on the Covid-19 vaccination front, and President Biden signed the $1.9 trillion American Rescue Plan Act into law. Direct $1,400 payments started showing up in bank accounts this weekend.
If there is one lesson from the recent reversal of market direction, market timing is fraught with peril and it is very easy to get “whipsawed”.
Market volatility has left investors unfazed and ETFs are clearly the investment vehicle of choice. The ETF industry has experienced its best start to the year, with a record $139.5 billion of monthly inflows in February – blistering pace of $4.7 billion a day. Globally, investors allocated $222.5bn in new cash to ETFs in the first two months of 2021.
The top three ETF inflows were into the SPDR S&P 500 Trust (SPY), Vanguard S&P 500 ETF (VOO), and the Financial Select Sector SPDR ETF (XLF).
The top three ETF outflows were the SPDR Gold Trust (GLD), the iShares iBoxx USD Investment Grade Corporate Bond ETF (LQD), and the Invesco QQQ Trust (QQQ).
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