SPY Loses $30 Billion While VOO and IVV Surge Ahead—Yet Traders Remain Loyal
SPDR S&P 500 ETF Trust (SPY) Faces Significant Redemptions
- Record Redemptions: In 2025, SPY has experienced $30.2 billion in redemptions year-to-date, nearing its historical high of $32.3 billion from 2015.
- Performance: Despite the S&P 500 index rising by 10% this year, SPY is struggling with significant outflows.
Vanguard S&P 500 ETF (VOO) Surges in Popularity
- Massive Inflows: VOO has attracted over $80 billion in inflows this year, with $12.5 billion coming in July alone.
- Market Position: VOO has surpassed SPY to become the world's largest ETF, largely due to its low fee of 0.03% and user-friendly features.
iShares Core S&P 500 ETF (IVV) Gaining Ground
- Strong Inflows: IVV has seen over $17 billion in inflows this year, now holding slightly more assets under management (AUM) than SPY.
- Competitive Fee Structure: Like VOO, IVV also charges a low fee of 0.03%, appealing to long-term investors.
Diverging Trends in ETF Flows
- Retail vs. Institutional: Retail-focused ETFs like VOO and SPLG have maintained steady inflows during market turbulence, while institutional-focused funds like SPY and IVV have faced outflows.
SPY's Continued Appeal for Traders
- Liquidity Advantage: SPY boasts an average trading volume of approximately 55 million shares per day, making it highly liquid compared to VOO and IVV.
- Established Market Presence: With over 30 years in the market, SPY is deeply integrated into trading strategies and remains a preferred choice for risk hedging and short-term speculation.
Conclusion
- Investor Behavior: Long-term investors are shifting towards lower-cost ETFs like VOO and IVV, while short-term traders continue to rely on SPY for its liquidity and established market presence.
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Fed's Goolsbee: US Is Not on Track to Achieve 2% Inflation, Rate Cuts Rely on Reduced Inflation
U.S. Consumer Prices: U.S. consumer prices rose lower than expected in January, with a 0.2% increase according to the Consumer Price Index (CPI) report, indicating a cooling labor market.
Inflation Expectations: U.S. citizens expect lower inflation in the near term, with one-year inflation expectations standing at 3.1% in January, down from 3.4% in December.
Federal Reserve Insights: Federal Reserve Bank of Chicago President Austan Goolsbee suggested that further rate cuts could occur if inflation trends towards the 2% target, although current inflation remains around 3%.
Market Reactions: U.S. equities ended the week mixed, with the S&P 500 ETF slightly declining while other ETFs, like the Invesco QQQ Trust, saw minor gains, reflecting bearish retail sentiment around the S&P 500.
FED'S GOOLSBEE: INTEREST RATES COULD DECREASE, BUT INFLATION PROGRESS IS ESSENTIAL
- Federal Reserve's Goals: The Federal Reserve aims to manage interest rates effectively to combat inflation.
- Current Economic Outlook: While rates can still decrease, there is a need for visible progress in reducing inflation.
Supreme Court Expected to Announce Next Opinion Day on February 20 in Ongoing Trump Tariffs Case — Latest Prediction Market Odds Revealed
Supreme Court Schedule: The U.S. Supreme Court is set to return on February 20 after a four-week recess, with significant cases including President Trump's tariff policy on the agenda.
Upcoming Opinions: The Court is expected to issue opinions on February 24 and 25, in addition to those scheduled for February 20.
Betting Markets Insights: Prediction markets indicate that bets regarding the Supreme Court's potential decisions are valued at over $9 million, with varying expectations on rulings favoring Trump.
Probability of Rulings: Data shows a 29% chance that the Supreme Court will rule in favor of Trump's tariffs by 2028, with PolyMarket bettors slightly more optimistic at 30%.
CPI Report: January's Annual Inflation Rate Hits 2.4%, Falling Short of Wall Street Projections
Core CPI Increase: The Core Consumer Price Index (CPI), excluding food and energy, rose by 0.3% in January, up from a 0.2% increase in December, with an annual rate of 2.5%, aligning with expectations.
Food and Energy Costs: Food costs increased by 0.2% in January, while energy costs decreased by 1.5%, indicating mixed trends in consumer prices.
Market Reactions: Following the CPI report, the 10-year Treasury yield fell to 4.062%, while the 30-year yield declined to 4.699%, reflecting market adjustments to inflation data.
Retail Sentiment: Retail sentiment around the S&P 500 ETF was described as "bearish," with mixed performance observed in U.S. equities during the trading session.
Bessent Claims Trump Administration Aims to Mitigate Risks Rather Than Sever Ties with China: Report
Treasury Secretary's Statement: Treasury Secretary Scott Bessenet stated that the Trump administration prefers to de-risk rather than decouple from China, emphasizing a dual strategy of engagement and fair trade.
Concerns Over Free Trade: Bessenet highlighted that free trade with China has been unfair, resulting in American workers being adversely affected in the process.
Experts Caution That CPI May Exceed Expectations: 'The Details Will Be Crucial'
January Inflation Trends: January inflation has historically been higher, with the Boston Fed noting that seasonal factors and frequent price resets can distort inflation data, potentially leading to elevated readings.
Market Expectations: Analysts anticipate that the Consumer Price Index (CPI) for January may exceed expectations, with predictions of a 0.3% increase, while annual growth rates are forecasted at 2.5%.
Investor Caution: Market experts warn investors to be aware of the potential for unexpectedly high inflation, emphasizing the importance of understanding underlying inflation trends as the CPI report approaches.
Broader Market Impact: The CPI report comes amid a broader market sell-off, with major indices like the Dow Jones and S&P 500 experiencing declines, reflecting investor sentiment and concerns over inflation.
Fed's Goolsbee: US Is Not on Track to Achieve 2% Inflation, Rate Cuts Rely on Reduced Inflation
U.S. Consumer Prices: U.S. consumer prices rose lower than expected in January, with a 0.2% increase according to the Consumer Price Index (CPI) report, indicating a cooling labor market.
Inflation Expectations: U.S. citizens expect lower inflation in the near term, with one-year inflation expectations standing at 3.1% in January, down from 3.4% in December.
Federal Reserve Insights: Federal Reserve Bank of Chicago President Austan Goolsbee suggested that further rate cuts could occur if inflation trends towards the 2% target, although current inflation remains around 3%.
Market Reactions: U.S. equities ended the week mixed, with the S&P 500 ETF slightly declining while other ETFs, like the Invesco QQQ Trust, saw minor gains, reflecting bearish retail sentiment around the S&P 500.
FED'S GOOLSBEE: INTEREST RATES COULD DECREASE, BUT INFLATION PROGRESS IS ESSENTIAL
- Federal Reserve's Goals: The Federal Reserve aims to manage interest rates effectively to combat inflation.
- Current Economic Outlook: While rates can still decrease, there is a need for visible progress in reducing inflation.
Supreme Court Expected to Announce Next Opinion Day on February 20 in Ongoing Trump Tariffs Case — Latest Prediction Market Odds Revealed
Supreme Court Schedule: The U.S. Supreme Court is set to return on February 20 after a four-week recess, with significant cases including President Trump's tariff policy on the agenda.
Upcoming Opinions: The Court is expected to issue opinions on February 24 and 25, in addition to those scheduled for February 20.
Betting Markets Insights: Prediction markets indicate that bets regarding the Supreme Court's potential decisions are valued at over $9 million, with varying expectations on rulings favoring Trump.
Probability of Rulings: Data shows a 29% chance that the Supreme Court will rule in favor of Trump's tariffs by 2028, with PolyMarket bettors slightly more optimistic at 30%.
CPI Report: January's Annual Inflation Rate Hits 2.4%, Falling Short of Wall Street Projections
Core CPI Increase: The Core Consumer Price Index (CPI), excluding food and energy, rose by 0.3% in January, up from a 0.2% increase in December, with an annual rate of 2.5%, aligning with expectations.
Food and Energy Costs: Food costs increased by 0.2% in January, while energy costs decreased by 1.5%, indicating mixed trends in consumer prices.
Market Reactions: Following the CPI report, the 10-year Treasury yield fell to 4.062%, while the 30-year yield declined to 4.699%, reflecting market adjustments to inflation data.
Retail Sentiment: Retail sentiment around the S&P 500 ETF was described as "bearish," with mixed performance observed in U.S. equities during the trading session.
Bessent Claims Trump Administration Aims to Mitigate Risks Rather Than Sever Ties with China: Report
Treasury Secretary's Statement: Treasury Secretary Scott Bessenet stated that the Trump administration prefers to de-risk rather than decouple from China, emphasizing a dual strategy of engagement and fair trade.
Concerns Over Free Trade: Bessenet highlighted that free trade with China has been unfair, resulting in American workers being adversely affected in the process.
Experts Caution That CPI May Exceed Expectations: 'The Details Will Be Crucial'
January Inflation Trends: January inflation has historically been higher, with the Boston Fed noting that seasonal factors and frequent price resets can distort inflation data, potentially leading to elevated readings.
Market Expectations: Analysts anticipate that the Consumer Price Index (CPI) for January may exceed expectations, with predictions of a 0.3% increase, while annual growth rates are forecasted at 2.5%.
Investor Caution: Market experts warn investors to be aware of the potential for unexpectedly high inflation, emphasizing the importance of understanding underlying inflation trends as the CPI report approaches.
Broader Market Impact: The CPI report comes amid a broader market sell-off, with major indices like the Dow Jones and S&P 500 experiencing declines, reflecting investor sentiment and concerns over inflation.
