US Stocks See Largest Cash Outflow Since November 2016

The world of stocks and investing is quite an intriguing one, even though things are not looking all that great for US stocks right now. In fact, it appears investors have pulled the largest t amount of cash out of US stocks since Donald Trump was elected to become the next President. It is evident investors are liquidating their US stocks at an accelerating pace right now, resulting in a withdrawal of US$3.7bn.

Large US Stocks Cash Outflow

To put this number into perspective, US$3.7n is the largest outflow of funds invested in US stocks when the US Presidential election week ended in November of 2016. At that time, the outflows reached a whopping US$6.4bn, which was quite a staggering amount. Although the current trend seems like less money exited the US stock market, there is no reason to celebrate just yet.

It appears the newly proposed economic stimulus measures may prove to be quite a negative development for the US stock market. President Trump announced he is considering imposing new tax cuts to boost the US economy. Unfortunately, that news seems to have had an adverse effect on the stock market so far.

Even though tax cuts are a positive development for the US stock market in general, investors remain rather cautious for the time being. Speculators pushed the Dow Jones Industrial Average above the 20,000 for the first time, although that may be only a temporary side effect. Domestic equity funds remain in bad shape, which will mean further volatility across the US stock market in the weeks to come.

Whenever an economic stimulus package is announced, the stock market tends to see more cash outflows. In November of 2016, the US-based fixed-income funds lost US$13bn to withdrawals. Although bond funds continue to attract fresh capital right now the situation remains uneasy for the time being. The stock market is very broad, and some funds continue to do well regardless of the overall trend.

Gold and other assets continue to see a healthy rate of fresh capital as well. A lot of traders and speculators remain fearful President Trump will create instability for the US Dollar. So far, it appears the American national currency has been weakening quite a bit,  even though there is no cause for alarm just yet. While all of this is going on, Bitcoin continues its path towards providing financial inclusion and freedom, to everyone on the planet.

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