Attached is a chart from 08/31/19 Barron's mutual fund section which shows inflows and outflows from:
- Equity Mutual Funds
- Tax Free Bond Funds
- Taxable Bond Funds
- Money Market Funds
The inflows to the tax free and taxable bond funds have been steady for some time while money markets are bringing in gobs of cash. With so much movement into the fixed income space, it is easy to see what is driving bond prices up and yields down all across the yield curve.
Equity mutual funds have been seeing steady outflows for a long while. Interestingly, the equity markets boomed yesterday. I would expect there to be downward pressure on equities driven by the trend out of equities.
Maybe we're in the melt up phase at the end of the long bull market. Earnings are slowing, economic metrics are decreasing and tariffs are in full swing. While I don't think anyone knows what's driving equity markets up, I'm enjoying the ride up, but I am in no way buying. I'll let someone else play that role!
