Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today focuses on big inflows into the largest bank-focused ETF, and some major moves shaping up for precious metals and bonds ahead of today’s Fed decision.
We mentioned larger inflows in ishares S&P 500 (NYSE:IVV) totaling more than $2.8 billion this week, and we have seen SPY join the fray with more than $5.2 billion being added via creations.
Sector ETFs like Financials (NYSE:XLF), which we have mentioned in the context of call buying lately in the name, have reeled in an impressive over $1 billion lately as well. These flows are certainly interesting ahead of today’s FOMC rate decision.
We are also watching Bonds and Precious Metals today, which are also moving, with SPDR Gold Shares (HK:2840) (NYSE:GLD) and (NYSE:SLV) rallying hard ahead of the FOMC decision. Meanwhile the U.S. Dollar (NYSE:UUP) is taking it on the chin and long bonds (NASDAQ:TLT) flying amid rates dropping like stones.
This is all noteworthy and curious activity ahead of this afternoon’s rate decision, as some would say these moves imply “no rate increase” from the FOMC — even though the odds strongly suggest a 25 basis point raise. We will see.
The Financial Select Sector SPDR Fund was trading at $24.17 per share on Wednesday afternoon, down $0.30 (-1.23%). Year-to-date, XLF has gained 3.96%, versus a 9.31% rise in the benchmark S&P 500 index during the same period.
XLF currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 39 ETFs in the Financial Equities ETFs category.