Weekly QQQ Net Capital Flow (US $ million). Source: Bloomberg
Investors are clearly nervous at the start of the quarterly earnings season: the largest exchange-traded fund (ETF) of technology stocks QQQ recorded a capital outflow of $ 6 billion last week, a record high since 2000, when the dot-com bubble burst. ). Interestingly, this happened on the eve of reports slated for this week by Amazon, Apple and Microsoft.
In 2020, net capital inflows to QQQ amounted to $ 16.7 billion (a record since 2000).
The deterioration in sentiment was likely driven by a Netflix report that reported weak subscriber growth in the first quarter. As a result of these events, QQQ closed down the first week of the past month.
A small number of tech companies that have already reported have exceeded earnings forecasts by an average of 18%, but their stock prices remained almost unchanged over the next 24 hours, Bloomberg reported.
“Perhaps the expectations of investors for tech companies are too high,” said James Pillow, managing director of Moors & Cabot ($ 2 billion under the management – approx. ProFinance.ru). “It is still too early to judge the results of the quarterly reports, but look at which sectors the positive profit surprises are coming from: materials, energy and finance. The money will follow the data, and the data will come from these sectors. “
This year, the net inflow of capital to ETFs by sector looks like this (data from Bloomberg):
- finance: + $ 15.7 billion;
- energy: + $ 14.4 billion;
- materials: + $ 4.9 billion; and
- technology: + $ 3.9 billion