By Trevor Hunnicutt
NEW YORK (Reuters) - U.S. fund investors pulled back from the stock market for a third straight week, withdrawing $11.6 billion in cash in the week ended Wednesday, in the face of a potential full-blown trade war between the United States and China, Lipper data showed on Thursday.
The markets have rocked back and forth over the past week on shifting sentiments of the likelihood of an all-out trade war. China retaliated on Wednesday against planned U.S. tariffs by targeting key U.S. products, though the United States later voiced willingness to negotiate a resolution.
"It makes sense that there's money flowing out of equities with everything we were seeing in the market," said Pat Keon, senior research analyst for Thomson Reuters' Lipper research unit. "The market is kind of deciding what to do right now so I think it is going to be this way for a bit before it settles down."
Late on Thursday, President Donald Trump said that he instructed U.S. Trade Representative Robert Lighthizer to consider $100 billion in additional tariffs on China after the country's state media said it would win any trade war.
Major companies start to report quarterly earnings this month, with investors expecting strong profit growth. Wall Street analysts expect first-quarter S&P 500 profits to rise by 18 percent over the year before, helped by the tax cuts passed in 2017, according to Thomson Reuters I/B/E/S.
International stock funds remain a relative bright spot, with emerging markets-focused funds taking in $636 million during the week and continuing an unbroken streak of weekly inflows this year, Lipper said.
Taxable bond funds attracted $3.5 billion during the week ended Wednesday, Lipper data showed. Treasury funds took in $3.1 billion, the most since January 2016.
The following is a breakdown of the flows for the week, including mutual funds and ETFs:
Sector Flow Chg % Assets Assets Count
($blns) ($blns)
All Equity Funds -11.605 -0.17 6,805.805 12,127
Domestic Equities -11.993 -0.26 4,572.759 8,616
Non-Domestic Equities 0.388 0.02 2,233.046 3,511
All Taxable Bond Funds 3.539 0.13 2,708.682 6,009
All Money Market Funds 1.880 0.07 2,693.384 1,039
All Municipal Bond Funds -0.247 -0.06 401.269 1,460