Analyst Paul Weisbruch points out some interesting money flows in his daily update, which include expected OPEC-fueled inflows to oil funds and perhaps an unexpected return to junk bond funds.
Crude Oil is up more than 11% in the past forty eight hours post OPEC, with the largest trackers like USO (U.S. Oil) gapping up to their highest levels since late October. USO has an $11 handle after having a $9 handle just two trading sessions ago on heavy trading volume, and has pulled in more than $600 million in the trailing one month period.
In other activity, High Yield Corporate Bonds have caught a bid lately with inflows in both HYG (iShares HY Corporate Bond, over $750 million in) and JNK (SPDR High Yield Bond, more than $665 million in). This trend is a big reversal from just a few weeks ago, when billions were leaving these sorts of high yield funds. With interest rates surging amid a massive government bond sell-off, perhaps we shouldn’t be too surprised that low-rated corporate debt is back in vogue.
Several iShares Large Cap, Mid Cap, and Small Cap funds have all attracted new assets lately as well, specifically IVV (iShares Core S&P 500), IJH (iShares Core S&P Mid-Cap) and IJR (iShares Core S&P Small Cap).
Finally, it looks like someone is selling OTM calls in XME (SPDR S&P Metals & Mining) and capping potential near term upside, likely against a long position in the ETF via December 32 strike options. Despite precious metals mining weakness, the XME’s exposure to base metals has helped it rally sharply since Trump’s election.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.