TRIM TABS LIQUIDITY UP-DATE, JUNE 20, 2000..
On Monday, liquidity was negative just $0.2 billion. The Trim Tabs Market Capital Index was up $264 billion, 1.5% at $17.82 trillion.
All equity mutual funds had an outflow of $1.3 billion. US funds had an outflow of just $0.6 billion. The average NAV was up 1.7%, but the breath was quite negative 19-40. Aggressive growth regained its lead over growth and income, but the flow into technology has been weak. International funds had an outflow of $0.7 billion. The average NAV was up 1%.
After 13 days, 60%, of June?s 22 trading days, although US mutual funds flow is running at a monthly rate of $24.6 billion, 135% of our estimated flows in May of $18.2 billion, this is nonetheless about one third less than the average monthly flow of $36 billion over the first five months of 2000. Mutual funds inflows have sustained liquidity this year. They have trumped new offerings and insider selling. The pace of new offerings seems to be quickened with $2.2 billion today and $3 billion yesterday, although against this takeovers seem to be picking up too.
Notwithstanding that the liquidity equation was almost balanced on Monday, we are betting on mutual funds inflow losing momentum and a pick up in new offerings. This points to lower markets in the short term. Watch mutual fund inflows tomorrow. With the NAV up 1.7% -- Aggressive Growth was up 2.3% -- on Monday, inflows should be very strong tomorrow $3-4 billion. We'll see.
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