This week also marked the 16th straight week of inflows into ETFs that track dividend-paying companies, with $6.9 billion flowing into these funds, according to EPFR Global data ended Wednesday.
Investors continued to funnel money into dividend-paying stocks even as the Fed raised interest rates for the second time in almost a decade and is set to hike rates an additional two times this year.
The markets previously believed that the strengthening economic environment could force the Fed policy makers to hike interest rates four times this year. However, with the Fed only expected to make two more hikes, areas that have sold off prior to Wednesday’s announcement are making a rebound.
“We got the rate increase that the market was looking for, albeit some of the future expectations were a little bit more muted then investors had been bracing for,” Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank, told Reuters.
Moreover, traders were also watching out for a surge of end-of-day volume Friday as a number of futures and options contracts are set to expire at the close in the so-called quadruple witching, which could increase volatility in the market.
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