Funds are not buying the bottom of US stocks and flooding into China

The S&P 500 closed down 1.14% on the 20th of this month, the second consecutive day of losses of more than 1% and one of the worst swings since the stock sell-off caused by the epidemic in early 2020.

In the past month, there have been two consecutive losses of more than 1% for two consecutive sessions.

For more than a year and a half, the strategy of buying U.S. stocks on dips has been very effective, but recent trends have proved that this strategy is failing.

For blue-chip stocks, last week's dip-buying investors refused to abandon the strategy. The SPDR S&P 500 ETF attracted funds for the fourth week in a row, the longest such streak of inflows since last September.

The Invesco QQQ Trust, the largest ETF tracking the Nasdaq 100, attracted about $5.5 billion in new funding last week, its highest level in 15 months.

Those buying, however, did not lead to a resounding rally in stocks, reflecting the fading appeal of bargain hunting.

BlackRock pointed out that the flow of funds has been changing in recent months, with the inflow of funds into global emerging market stock ETFs falling sharply, and funds flowing to single-country funds, led by Chinese funds.

These signs are reflecting the market's gradual change in preferences, which will become the new keynote of the market trend in 2022.