tl;dr
A new report reveals that investors have deposited a record $6.47 trillion into money market funds, with $11 billion entering the funds in the last week alone. This surge is attributed to investors seeking higher yields on their cash as the Federal Reserve raised interest rates. However, analysts at...
A new report reveals that investors have deposited a record $6.47 trillion into money market funds, with $11 billion entering the funds in the last week alone. This surge is attributed to investors seeking higher yields on their cash as the Federal Reserve raised interest rates.
However, analysts at JPMorgan Chase caution that the money market trend will eventually decline as the Fed continues to cut rates, although they anticipate this will not happen in the short term. JPMorgan strategists expect that money will start exiting money markets several months into the easing cycle, particularly as they track the yield curve between three-month Treasury bills and two-year bills, which remains inverted.
The majority of the recent inflows, totaling $11 billion, came from retail investors, with the remaining $3.19 billion from institutional investors.
Investors have now deposited a record $6.47 trillion into money market funds, according to a new report. In the last week alone $11 billion has entered the funds, reports Bloomberg, citing data from the Investment Company Institute. Investors flocked to money market funds as the Federal Reserve raised interest rates to get higher yields on their cash.
Now that the Fed has started to cut rates, analysts at JPMorgan Chase warn the money market mania will come to an end – but not in the short term. “Typically, money-market funds do not experience outflows until the Fed is further along the easing cycle and the Treasury curve has normalized and become stable.”
JPMorgan strategists say that during Fed easing cycles, it typically takes a few months for money to begin exiting money markets. This time around, they say it could take longer for outflows to begin. They’re tracking the yield curve between three-month Treasury bills and two-year bills, which is still inverted, as a key indicator.
The majority of the fresh money entering the funds in the past week came from retail investors, who fueled $8 billion in inflows. The remaining $3.19 billion came from institutional investors.
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Technical Analysis Report
Summary:
After conducting a thorough analysis of the market charts and various technical indicators, it is evident that the stock is currently at a critical support level. The Relative Strength Index (RSI) is displaying a bullish divergence, indicating a potential reversal in the near term. Additionally, the moving averages have recently formed a bullish crossover, further supporting the likelihood of an upward price movement. However, it is essential to remain cautious as the stock is approaching a significant resistance level, which may result in a potential pullback. The Bollinger Bands are also indicating a period of increased volatility, adding to the uncertainty of the current market conditions. While the overall outlook appears optimistic, it is crucial to monitor the price action closely for confirmation of a sustained uptrend.