JPMorgan Reports 10th Consecutive Week of Outflows in EM Equities

U.S. stocks experienced strong demand last week following the Federal Reserve’s decision to cut interest rates. In contrast, emerging market equities faced ongoing challenges, with the sector recording outflows for the tenth consecutive week, as reported by JPMorgan.

On Friday, more than 20 billion shares were traded on U.S. exchanges, marking the busiest day since January 2021. The S&P 500 index has increased by 1% so far in September, a month that historically tends to be weak for stocks. Year-to-date, the index has risen by 19%, reaching all-time highs.

This optimistic sentiment in U.S. markets stands in stark contrast to the decline observed in emerging markets, where JPMorgan highlighted an outflow of $599 million this week, bringing the total selloff over ten weeks to $13.6 billion.

The outflows included both exchange-traded funds (ETFs), which accounted for $476 million, and non-ETFs, which saw $123 million in selling. Regionally, the decline was primarily driven by Asia ex-Japan, experiencing outflows of $687 million (down from $1.1 billion). Meanwhile, the EMEA region posted smaller redemptions of $31 million (down from $94 million).

Globally, emerging markets saw marginal inflows of $109 million, with Latin America registering small inflows of $10 million after 13 weeks of outflows totaling $1.8 billion.

In the realm of emerging markets, India continued to attract inflows for the fifth week, gaining $1.6 billion this week, totaling $7.4 billion. Indonesia also saw a significant increase with inflows of $1.4 billion. Taiwan recovered with net purchases of $806 million after three weeks of heavy redemptions totaling $8.2 billion, although Korea remained under pressure with outflows of $453 million.

Thailand experienced above-average inflows of $181 million, following a record influx of $745 million the previous week. The Philippines and Malaysia also recorded modest subscriptions of $41 million and $18 million, respectively, while Brazil saw minor inflows of $59 million after experiencing outflows the week before.