Equity ETFs posted net inflows for the third straight week, with inflows of just over $2.8 billion last week. Authorized Participants (AP) were net redeemers of the U.S. (as opposed to GEM) equity ETFs (-$3.9 billion) and posted outflows for the third consecutive week, while foreign equity ETFs had net inflows for the fifth consecutive week and raised $6.7 billion in the past week, which is Its largest weekly net inflow since records began in 1996, since Refinitiv Lipper Flows stats weekly inflows inception. International Equity ETFs (+$6.6 billion) recorded the largest net inflows in the macro group of equity ETFs during the Fund Flow week, followed by Large Cap ETFs (+$890 million) and Sector Energy ETFs (+$186 million). Meanwhile, the Healthcare/Biotech sector ETF (-$1.3 billion) had the largest net outflows, ahead of the Financials/Banking sector ETF outflows (-$837 million).

U.S. stocks extended last week's rally into Monday, Jan. 23, led by the Nasdaq, as investors looked ahead to a continuation of the fourth-quarter corporate earnings season and the prospect of a soft landing for the economy. Of the 57 companies in the S&P 500 that have reported Q4 results so far, 63.2% have beaten their consensus estimates (just under 66%, lower than long-term average). Meanwhile, investors pushed the 10-year U.S. Treasury yield up 4 basis points to 4.52%.

Despite mixed, at best, Q4 corporate earnings reports so far, weak economic data and Fed officials' firm pledge to fight inflation ahead of this week's policy meeting, U.S. stocks posted relatively strong returns in a week of capital flows, while fixed-income indexes saw slight declines.

As a result, investors proved to remain net buyers of broad fund assets, for the fifth (!) week in a row, including its traditional funds and ETFs, raising a net $21.9 billion in the week ended Wednesday, Jan. 25. Fund investors were net buyers of money market funds (+$15.4 billion), taxable retirement funds (+$5.8 billion) and tax-exempt fixed income funds (+$1.3 billion), while equity funds were net reducers for the week (-$555 million).