Fears of rising protectionism seem to weigh heavily on the markets. Not surprisingly Equity funds suffered their second-largest outflows ever in the week ended June 28, as reported by Bank of America Merrill Lynch. This underscored the week’s downward slope of the major exchanges.   For the last two days of the week ended June 28 the indices increased slightly. However, the gains are suspect since the market tends to trade higher at the end of a quarter due to painting the tape activities.

The huge outflows from equities and bond funds is a global phenomenon, which included outflows from Europe, Japan and emerging markets. Together the decline was close to $10 billion in addition to the $24.2 billion from the US.

Flight to safety has been a major factor for some time now and will continue to weigh heavily on the markets in the weeks ahead. It should be a strong factor as it becomes increasingly clear that Trump’s efforts to underpin the American economy are faltering. In addition, Trump’s economic advisor Larry Kudlow has admonished the Fed for being too tight-fisted. Apparently, the Trump administration is getting nervous about the economy and wants the Fed to refrain from its hiking rates in the months ahead.  Its becoming increasingly difficult for anything to be predicted.