Dec 6, 2019 - Economy & Business

Traders keep selling stocks and stuffing cash into savings accounts

Data: Investment Company Institute; Chart: Andrew Witherspoon/Axios
Data: Investment Company Institute; Chart: Andrew Witherspoon/Axios

The return of bullish sentiment that has driven the stock market to fresh all-time highs hasn't dented the safe-haven appeal of money market funds, which are akin to savings accounts or holding cash.

Why it matters: In fact, data shows investors are still selling equities on an overall basis and moving that money into money market funds.

By the numbers: For the week that ended Dec. 4, $2.37 billion of inflows had gone into MMFs, taking total holdings to nearly $3.6 trillion, data from the Investment Company Institute shows.

  • Money market funds have seen the third-highest annual inflows this year since ICI began keeping track in 1984.
  • This year's inflows trail only 2007 and 2008 when the world was in the throes of the financial crisis.

The intrigue: The flows are happening despite a nearly 25% gain this year for the S&P 500. And even during the market's latest breakout and bull run since September, global and U.S. equity funds have had consistent outflows.

  • Flows into money market funds last week were higher than any weekly fund flows into U.S. equity mutual funds and ETFs since the week ending Oct. 16.
  • U.S. and global equities have seen net outflows in eight of the last 10 weeks, according to ICI's data.

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