The relentless buying spree in US equities is showing signs of fatigue, with the so-called 'MANGOS' stocks — the new acronym for the mega-cap technology leaders driving the market — facing renewed scrutiny as investor sentiment shifts.
US equity mutual funds and exchange-traded funds recorded their first net outflows since March, marking a distinct reversal in capital flows as summer trading commences.
This shift suggests that the broad-based rally, which was recently fueled by softer-than-expected employment data in June, may be losing momentum among institutional investors.
The softer jobs report had previously triggered a surge in stock prices, as markets interpreted the data as a signal that the Federal Reserve might cut interest rates sooner than anticipated.
However, the return of net outflows indicates that some investors are taking profits or rotating away from high-valuation growth stocks, particularly in the artificial intelligence sector.
The 'MANGOS' group, which includes companies like Microsoft, Apple, Nvidia, Google, and Amazon, has been the primary engine of market gains this year.