Forget earnings: Stocks have two big tailwinds pushing them higher

Traders on the NYSE, May 3, 2021.

Source: NYSE

It’s not just about earnings anymore: Dividends and huge inflows are helping stocks power forward.

April trading data is in, and it shows two surprises: an increase in dividends, and huge inflows into equities that are even stronger than the first three months of the year.

Dividends are back

Investors enthusiastic: Big inflows into ETFs continue

Near-record inflows into ESG, thematic tech and other areas are also supporting prices.

Exchange-traded funds started the year just short of $6 trillion in assets under management, and inflows have continued on a consistent basis every month in 2021.

An extra $55 billion was put into equity ETFs in April, for a year to date total of $258 billion in equity inflows. 2021 will certainly see much higher equity inflows than 2020, when panicked investors threw money into bond funds.

“The money’s coming from everywhere,” Harry Whitton, senior vice president at Old Mission, an ETF market maker, told me. “There are people still sitting at home who are putting money into the markets. You are seeing huge interest in [Environmental, Social and Governance] ETFs. You are continuing to see money come out of mutual funds and into ETFs as well.”

Is the Reddit crowd turning into long-term investors?



Source link

Leave a comment

%d bloggers like this: